In an interview during the ongoing 2024 Impact Climate Conference in Haikou, experts shared their insights on how climate issues have evolved from being solely an environmental concern to becoming a critical focus for business development amid increasingly severe global climate change.
According to He Kebin, an academician at the Chinese Academy of Engineering and a professor at Tsinghua University’s School of Environment, recent statistics indicate that as of September 21, the countries and regions announcing carbon reduction targets now account for nearly 90% of global CO2 emissions, GDP, and population. “Carbon reduction is now a widespread global endeavor,” he stated. He emphasized that businesses’ carbon footprints are now key components of assessment within international supply chains, with expectations for suppliers to disclose their carbon data.
Gao Yong, Vice President of Public and Government Affairs at Bayer (China) Co., Ltd., noted that in Brazil, Bayer is already tracking and calculating the carbon footprint of soybeans from field to market. “The data collected will directly impact the international competitiveness of our products,” he explained. He further cautioned that as policy trends continue, more products could face additional carbon taxes or pricing mechanisms. “China’s ‘dual carbon’ targets are imperative, and both society and enterprises must take this seriously and take action—especially early action from businesses will be crucial for maintaining market competitiveness.”
Chai Qimin, the Director of the Strategic Planning Department at the National Center for Climate Change Strategy and International Cooperation, pointed out that climate change is reshaping the global economic landscape. “The carbon emission space is becoming increasingly scarce and is now as critical a natural resource as land and key mineral resources,” he said. He warned that at the current rate of emissions, the world has only seven to eight years of remaining carbon space if we wish to limit global warming to within 1.5 degrees Celsius.
Chai further elaborated that climate risks are becoming significant factors influencing financial investments. “First, natural risks have increased—over the past fifty years, the frequency of natural disasters and extreme weather events has risen about fivefold, resulting in economic losses that have increased sevenfold. Secondly, policy risks are emerging as more countries commit to carbon neutrality, which will impose higher emission reduction costs on high-carbon investments. Lastly, there are systemic risks stemming from climate disasters that could lead to significant stability and security issues.”
In discussing how businesses can adapt, Zhang Zhengwei, Senior Advisor and Director of the Beijing Office at the International Sustainability Standards Board (ISSB), emphasized the importance of accurately describing, measuring, and reporting climate-related risks for effective management. The ISSB has released new international sustainability disclosure standards aimed at precise quantification of these risks and their reflection in corporate asset valuations. He noted that over 20 jurisdictions globally have chosen to adopt or incorporate the ISSB standards, collectively representing 55% of global GDP, 50% of greenhouse gas emissions, and 40% of capital market valuation.
Zhang also mentioned that, according to the International Energy Agency (IEA), 50% of technologies aimed at mitigating climate change and reducing greenhouse gas emissions are not yet commercialized. He pointed out that while the initial cost of these technologies may be high, they also present significant market potential and investment opportunities. He cited electric vehicles as an example; although their initial investment can be large, advancements in technology and scaling production have brought costs down, leading to a steadily increasing market demand.
Encouragingly, Zhang noted that the market is shifting towards greener products. In July 2024, the penetration rate of new energy vehicles in China surpassed 50%, arriving eleven years ahead of the country’s initial target set for 2035. “A decade ago, when we conducted surveys, 99.9% of people were unwilling to pay extra for environmentally friendly products. But now, in cities like Shanghai, if the price of recycled material products is 10% to 20% higher, over 70% of people express a willingness to buy them,” stated Du Huanzheng, Director of the Institute of Ecological Civilization and Circular Economy at Tongji University. This shift in consumer mindset lays a solid market foundation for businesses seeking green transformations.
Du encouraged companies to leverage the momentum of green consumption to achieve their own transitions, integrating the industrial chain, consumer chain, and recycling chain into a cohesive unit. He suggested specific actions, including constructing new industrial ecological chains that guide the industry towards more sustainable practices, utilizing clean energy and recyclable packaging materials to ensure efficient product lifecycle recovery, and implementing rigorous product traceability and certification systems to boost consumer confidence in green products.
