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Simon Ng and Jonathan Ho of Hong Kong’s Business Environment Council explain how the newly signed BEC Low Carbon Charter will show a way forward for the sector in greater China
Last month, 31 major companies across Hong Kong’s property and construction value chain signed the BEC Low Carbon Charter. Through the charter, signatories voluntarily commit to work towards setting and achieving decarbonisation targets, taking note of the goals of the Paris Agreement, disclose progress towards setting and achieving the targets, and advocate target-setting and low-carbon practices across the value chain. The charter is a timely and significant statement of business leadership and initiative, as it coincides with the Hong Kong government’s development of the city’s Long-Term Decarbonisation Strategy.
Businesses taking climate action is not just a matter of philanthropy: it’s good for business. A survey by the Science Based Targets initiative reported that 79% of corporate executives found that setting ambitious decarbonisation targets strengthened brand reputation, 52% saw investor confidence boosted, 63% said the targets drive innovation, and 55% reported they gained a competitive advantage. In Hong Kong, recent research found that implementing retrofit technologies in buildings can achieve energy (and cost) savings of more than 50%, with payback periods of no more than 10 years.
As with most business initiatives and commitments, there are drivers and enabling factors that lead to the culmination of business action. In the case of the BEC Low Carbon Charter, BEC was the catalyst. The charter was the outcome of a strategic and systematic process of engagement and capacity building. In 2017, BEC published a primer that puts forward the business case for setting decarbonisation targets and introduces the methods to do so.
The engagement of China’s property and construction sector is of paramount importance in the world’s decarbonisation journey
Building on the introductory report, BEC commenced a focused research and engagement initiative targeting the property and construction value chain in 2018 to raise understanding on the benefits and imperative of taking significant climate action, to support businesses in setting targets and strategies aligned with the Paris Agreement, and to build capacity and collectively solve problems encountered in the target-setting and decarbonisation journey.
Throughout 2018, BEC initiated “bottom-up” and “top-down” efforts. Working-level professionals of companies in the value chain were engaged through a series of creative, yet practical, workshops to build know-how on sector-specific low carbon best practices; C-level business leaders were engaged through a high-level roundtable event, fostering top-level support for strategic change. Riding on the momentum, the BEC Low Carbon Charter was developed, with inputs from businesses, to mobilise concrete and collective actions across the property and construction value chain.
Why begin with property and construction? In Hong Kong, being a dense urban metropolis, 90% of electricity consumption and more than 60% of greenhouse-gas emissions are attributed to buildings. Construction and construction materials are important, too, as they on average account for 15-20% of buildings’ lifecycle carbon footprint. Given the sector’s prominence, decarbonising the property and construction value chain is critical towards Hong Kong’s low carbon transition.
The BEC Low Carbon Charter, as with many other initiatives globally, is a success story of positive action. And as we are in a moment where climate activism is needed more than ever, the success formula of the charter could, and should, be endeavoured beyond Hong Kong. Greater China, for example, has tremendous room and need to decarbonise its property and construction value chain. The engagement of China’s property and construction sector is of paramount importance in the world’s decarbonisation journey as Chinese companies are actively involved in construction projects worldwide.
At the turn of the new millennium, the percentage of China’s urban population iwas in the 30s, this is expected to reach 60% by 2020
China is urbanising at a breath-taking rate. Over the last 35 years, almost 500 million rural Chinese people have moved into cities. China now has more than 600 cities, many of which were small towns just a few decades ago. At the turn of the new millennium, the percentage of China’s population in urban areas was in the 30s, but this number is expected to reach 60% by 2020.
With cities being formed and buildings being built at lightning speed, the significance of the property and construction sector in China’s economic and greenhouse-gas emissions profiles will only increase. A multi-pronged approach to decarbonise the value chain is needed, including the right policies and the use of best practices and technologies. And certainly there is scope to replicate the BEC Low Carbon Charter’s formula of engagement, capacity building, and collaboration amongst stakeholders, to achieve the large-scale climate action we urgently need.
Moving forward, BEC will keep track of the decarbonisation progress of signatories of the charter and provide support to signatories where needed. In the grand scheme of things, BEC will continue to play the role of catalyst – driving positive action for a sustainable future. It is indeed time for activism. While there is still much to do, if we continue, accelerate and scale up the current momentum of action, there may even be room for some optimism.
Simon Ng is director and Jonathan Ho is assistant manager for policy and research at the Business Environment Council (BEC), an independent charitable organisation established by the business sector to promote environmental excellence. BEC has launched the BEC Low Carbon Charter to mobilise concrete and collective actions across the property and construction value chain. For more on Asia's building sector, see Singapore leads way as Asia's developers wake up to climate risk