The Heat Is Online

Asian Business Leaders Focus on Climate Impacts

Leaders of Asian industries wake up to regional impact of global warming
The Financial Times, Nov. 19, 2004

For decades, most Asian business leaders have dismissed concerns about the global environment as a western preoccupation of no importance for profits or prestige. "Green" issues, they said, were of interest only to unrealistic do-gooders and Scandinavian aid agencies.

Such attitudes are starting to change. As they become integrated into the global trading system, big Asian companies are increasingly called to account over environmental and labour standards by foreign partners and customers. Chief executives, meanwhile, are confronted daily with direct evidence of environmental damage, including toxic smog in cities such as Beijing and Hong Kong.

At a discreet meeting today in Singapore, chief executives of some of the biggest companies with operations in Asia will go a step further.

Members of the exclusive Asia Business Council (ABC) will hear David Griggs, a British climate expert, explain the threats posed to the region by global warming, including potentially drastic changes to Asian temperatures and rainfall patterns in the coming decades.

Business leaders will also be reassured by company chiefs in high-polluting industries that it is possible to adopt green policies and still make money.

Ruth Shapiro, ABC executive director, is as encouraged by the newly receptive attitude of the group's members as she is concerned about Mr. Griggs' climate data. "People are asking 'What kinds of behaviour do we need to be changing within our companies?'," she says. "I feel that's new."

According to Ms. Shapiro, the old anti-green rhetoric of "Who's the west to tell us what to do when they polluted for 50 years?" has been replaced by pragmatism. "It's not in anybody's interest to have polluted spaces. CEOs have to live here too, along with their children."

Esquel, the Hong Kong-based textiles group whose chairwoman Marjorie Yang will chair a session on "profiting from sustainable development", sees itself as an Asian frontrunner in social and environmental policies. The private group, which has more than 47,000 employees, has first-hand evidence of worsening environmental conditions in western China.

K. L. Lee, Esquel's executive director, says water shortages in Xinjiang have changed the environment in the province in a matter of years. "When we started our Turpan spinning mill in 1995-96, Turpan was still seen as a possibility for growing long-staple cotton," he says. "But Turpan has ceased to be a viable or important cotton-growing area." Cotton for the mill must now be transported from distant fields.

Like Esquel's Ms. Yang, JaMs.hyd Godrej of Godrej & Boyce, Indian refrigerator-maker, is a proponent of energy-saving and waste-recycling for practical as well as ethical reasons. "All these things lead to lower costs and better competitiveness," he says. "And the 'fundability' [financing] of any project today is dependent on the environmental impact."

With the help of European governments, Mr. Godrej has already switched to hydrocarbons from chlorine-based refrigerants that have a big impact on the ozone layer and global warming. "If temperatures go up by one or two or three degrees on average, what are the implications for agriculture, water and water use? Overall for economies this is very, very important, although I think it's still not understood what the direct impact on industry could be," he says.

Bertrand Collomb - who heads the French building materials group Lafarge and chairs the World Business Council for Sustainable Development - is expected to show how multinational groups can lead the way, even in "dirty" industries such as cement-making.

When it builds new plants, Lafarge applies the same emissions standards in developing countries as it does in Europe or the US, and it aiMs. to reduce carbon dioxide emissions per tonne of cement by 20 per cent between 1990 and 2010.

Mr. Collomb says two-thirds of China's cement kilns are of an old-fashioned and inefficient design not seen in Europe for decades.

Replacing them would save energy and allow economic growth to proceed without a proportionate growth in energy use and carbon dioxide emissions. "Often these are not technologies that are secret or patented," he says. "These are in the public domain."

In Asia, environmentally minded chief executives such as Ms. Yang and Mr. Godrej are still in the minority. But public pressure, glaring pollution probleMs. and the dangers of global warming are beginning to have an effect. "In the last five years, and certainly in the last two or three, people are much more aware of the importance of the environment," says Esquel's Mr. Lee.