STEPPING UP GOOD GOVERNANCE TO SEIZE OPPORTUNITIES AND REDUCE RISK Mun Yeow, Partner, Clyde & Co Hong Kong Since the publication of Clyde & Co’s first climate risk report in 2018, the conversation around climate change at an organisational level has grown implicitly. Global emissions must halve by 2030 to keep global warming below 1.5 degrees according to the Paris Agreement, with over 110 countries committed to becoming carbon neutral by 2025. With the countdown to net zero carbon emissions well under way, companies of all sizes are starting to see that beyond damage caused to the planet, climate change poses a threat to all aspects of their business, with risk and regulation accelerating.
Many factors are converging at once which could spark real change. A wholesale transformation of large parts of the global economy is on the horizon while consumer attitudes and expectations are evolving rapidly. So-called “soft” compliance pressures from shareholders, customers, employees and the media to do better and “hard” compliance pressures from laws, regulators and rising litigation are both set to increase. The situation is equally urgent in Hong Kong. The recent landmark report from the UN-backed Intergovernmental Panel on Climate Change (IPCC), warns that countries’ current commitments are not nearly enough to achieve the threshold of the Paris Agreement. Reporting in the Hong Kong press has focussed on the potential for Hong Kong to suffer typhoons more destructive than Typhoon Mangkhut, droughts that wreak havoc on its supply of drinking water, and intense heatwaves if global warming exceeds 2°C by 2050. Hong Kong is continuing to get to grips with the issue. Last year, the Hong Kong Monetary Authority and the Securities and Futures Commission established a Steering Group for green and sustainable finance. Their strategic plan, announced in December last year, requires climate-related disclosures to be aligned with all recommendations of the Taskforce on Climate-Related Financial Disclosures (TCFD) d
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