Asian businesses stand to gain US$4.3 trillion ($5.73 trillion) by the end of the decade from the expansion of renewable power, energy efficiency in buildings and promoting greater circularity in producing industries. Similarly, 58% of the jobs required to service those opportunities will be situated in Asia, creating as many as 232 million roles for the region.
This is according to the Accelerating Asia’s Advantage: A Guide to Corporate Climate Action report, released on April 21 by the World Economic Forum in collaboration with SAP and Boston Consulting Group’s (BCG) Southeast Asia Centre for Climate & Sustainability.
On the flipside, climate change could have a disproportionate impact on Asian economies and people. Based on a severe increase of 3.2°C by 2050, Asia is projected to see a reduction in GDP by over 26%, higher than an estimated 18.1% impact to GDP globally.
Closer to home, Southeast Asia is predicted to experience a GDP reduction of 37% — by far the worst around the globe.
The potential GDP impact could cause even further pain. The whitepaper cites an April 2023 paper by Swiss Re Institute, which estimates a projected 46% drop in GDP for Singapore or Malaysia, a 43% GDP drop on Thailand or a 39% GDP drop on Indonesia in a worst-case scenario.
It is past the time for economies in the region to take notice, reads the whitepaper. “Four Southeast Asian nations — Myanmar, the Philippines, Vietnam and Thailand — are among the top 10 countries most affected by climate change over the past 20 years.”
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Asia is key on the journey towards net zero, says Neo Gim Huay, managing director of the Centre for Nature and Climate, World Economic Forum. “Asia accounts for 51% of annual global greenhouse gas emissions. More than half of annual emissions are from industries like electricity, manufacturing and land use.”
Business has a strong role in cutting emissions and climate action, says Neo. “To scale, accelerate and sustain efforts, businesses need to collaborate with government and communities, harness innovation, and build partnerships across their value chains.”
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The business case for climate action is clear, says Paul Marriott, Asia Pacific and Japan (APJ) President at SAP. “We know that 50% of Asian businesses believe addressing environmental issues will be material to business results within the next five years. Organisations who ignore or hedge their climate strategies gamble their ethics, revenues, and competitive advantage.”
Unmitigated climate change is the biggest threat of our generation, says Neeraj Aggarwal, Chair, BCG Asia-Pacific. “The world economy could lose more than 18% of current GDP if no action on climate change is taken. And the impact would be significantly higher in Asia, at almost 26%.”
Aggarwal adds: “At the same time, Asia is at a pivotal juncture in its history, where beyond its vulnerability, it also represents the biggest economic opportunity for global climate action. The time is right for Asian leaders to make bold strides for the good of their businesses, and the world.”
