Harvard University

Tackling pollution from the transport sector continues to be a challenging issue for many countries, especially in places where many rely heavily on private transportation. Full transition to Electric Vehicles (EVs) remains testing for many planners.

This is because EVs, at the moment, cannot happen without lithium and according to research by International Energy Agency (IEA), we would need to mine almost 42 times as much lithium as was mined in 2020 if we would meet the climate goals set by the Paris Agreement.

With this, we then need to understand that existing mines and projects under construction would meet only half the demand for lithium in 2030. Demand currently outstripped supply by far, which explained the rise in metal prices and the pressure might not fall before 2024.

In addition to that, some lithium rich areas fall into the areas bordering several territories. The race to secure lithium might add additional pressure to the already tense situation along these borders, further complicating the current geopolitical situation.   

Already, many are shifting their attention to several lithium alternatives ranging from hydrogen fuel cells, lithium-sulphur, graphene supercapacitors, redox flow batteries, aluminium-graphite batteries, solar panels, solid-state batteries amongst others.

Others, while planning for the electrical grid of the future, are experimenting with hybrid charging stations for vehicles, in order to mitigate future risks. 

I am arguing that nobody in their right mind, would want to dive 100% into building only pure electric charging stations for vehicles.

Why? 

Let’s say you have the political will, government machinery, financial prowess and with all these, the support of the private sector, to secure all the required EVs and lithium-related products/ infrastructure in your jurisdiction.

On one hand, you are ahead in the EV race. On the other hand, the entire situation might drown into a spiral whereby there is not enough lithium to go around for the rest of the world so eventually the price simply becomes too high for the rest to adopt.  

If the price of EVs goes beyond what consumers could afford, it might result in insufficient demand for EVs, thereby prompting the private sector to diversify production to other types of vehicles. No matter what, it is relatively easier for the private sector to make changes compared to public sector’s commitment to large infrastructure projects.  

Plus, the supply of lithium currently depends heavily on the mining industry, a sector that is fraught with a myriad of ESG issues ranging from destruction to natural habitat, degradation of geotechnical profiles, disruptions to nearby communities, illegal discharges to nearby water bodies and the list goes on. 

There is a good chance that the supply of lithium through mining, would still continue but the price of the metal would escalate because of Environment, Social and Governance (ESG) considerations, certifications, ratings, operational restructuring, asset investments and so on. 

Apart from these, the narrative about decarbonization seems to be electrifying everything; aircrafts, trains, trams, trains, three-wheelers, motorbikes, etc. With so many competing interests, the current and future inflationary pressure on this metal is simply too high. 

So, when two hands meet, the rest of the world is finally going to wake up to the issue of limited lithium, and might eventually decide that it could be more sustainable and cost-effective  to diversify into hydrogen fuel cells, bio-fuels, etc or maybe even continuing with traditional gas/ petrol. 

In fact, a few have already acknowledged the situation, and are shifting their attention to building capabilities to reconfigure internal combustion engines to run on bio-fuel. Others are starting to experiment with hybrid charging stations that has solar PV panels and able to store natural gases as well. 

Recycling efficiency of lithium is not 100% but the technology powering the battery recycling business is promising. Even though that may be the case, the eco-system should be flexible enough to cater to any future disruptions. In the scenario where there is not enough lithium to produce new cars, the societal machinery could still continue to function reasonably well and not be held ransom to a single type of vehicle.

For this, I like to think that it is a zero-sum game which is why we need to adopt an eco-system approach to the game. Finite amount of lithium means that there would be limited supply of EVs. Most likely, the ones who can own this limited supply of EVs,  are the ones who can afford to. Yet, it should not end up in a situation where there are a few “winners” at the expense of the rest.

Transitioning to a decarbonized future depends to a large extent on creating a win-win situation resting on strong partnerships fostered through open and transparent collaborations among countries and tight coordination between the public and private sector. 

This brings us to my original point, that is, while planning for the electrical grid of the future, it is very important to build flexibility into the planning and be open to experimenting with hybrid charging stations for vehicles, in order to mitigate any future risks.

Photo by Christina Morillo

Our educational system, as well as the way our society has evolved, has conditioned people to become more disinterested in science and technology education. Fewer individuals desire to study engineering and mathematics, which I strongly believe will be a major issue in the future.

In fact, many governments have already identified this issue and started working on it for quite some time.

Social media platforms have influenced our attention span and modified the way we receive information. Fewer people are reading books. Some merely read the headlines of articles and may skim through a portion of the piece before quitting halfway through.

In fact, it is recommended that content creators limit their pieces to no more than three paragraphs and no more than 500 words.

Video commercials must be no more than one minute long and must be able to capture people’s attention within the initial three seconds.

Professional development books are increasingly shorter, and many are encouraged to pepper pages with condensed summaries throughout the book, which is why the very popular Idiot’s Guide series have those little summary pop ups every few pages.

This loss in attention changes how information is collected and consumed and, as a result, affects how teaching and learning take place.

How often has your focus wandered during a meeting or a conference, and a phone check has become the norm? Most things receive only a fraction of my attention.

Students who listen while texting divide their focus between where their bodies are and where their brains are. The most recent adaption of short attention span instruction may be found in videos that are now available on Tik Tok and Instagram.

There is only one notion, one idea, and one instruction and no reading required, which is why these social media platforms are huge hits with the younger generation.

In a recent ranking survey done by an East Asian country, they ranked South Korea has having the best mathematics education system, followed by Singapore and the third place goes to Japan.

This East Asian country used to consider themselves as the best in providing mathematics education, but they’ve determined that their ranking has fell. They considered this a major issue and are putting their best people to work with the private sector, to develop a proposal to rectify it.

Still, research is being done by the best to further improve their position and one of the latest ideas is to introduce gaming to teach science, mathematics and programming.

I saw the latest research on teaching with games, and it allows players to immerse themselves in a Role-Playing Game (RPG) with attention-grabbing storyline that’s paired with beautiful graphics. Players will be able to solve interesting puzzles and fight fantastic battles with enemies throughout the game, and somehow all these actions are performed by solving programming scenarios.

By the end of the game, you are supposed to be able to understand the logic flow of programs and how to sew together the different syntaxes to achieve your desired programming outcomes.

It’s really quite fun and research is being done to quantify its relationship to improving users’ programming proficiency while keeping their attention on the game.  I think that the research results should be released in about two to three months’ time.

I believe that within a few more years, we will no longer need to type syntaxes in order to program. Long gone will be the days whereby you’ll feel cool to be able to type in long strings of words, press “Enter” and then strings upon strings of neon green colored fonts on black background scrolls endlessly down the computer screen. Think Matrix opening and ending scenes.

Anyway, if you think that’s cool, you’ll most likely might be considered as outdated by the younger generation.

Graphical programming is unquestionably on the rise, and more parts of Artificial Intelligence (AI) will eventually be merged with programming languages, making it easier to program in the long run.

Photo by Quang Nguyen Vinh

Written by Zeng Han Jun

A recent survey showed that there is a slight shift in people’s interest in favor of renewable energy. According to this survey, governments should consider exerting more influence in raising environmental consciousness and bridging the gap between people’s desires and realistic energy alternatives (Zhang, Abbas,Iqbal, 2021). Popular renewable and clean energy options include hydroelectric, geothermal energy, wind energy, solar energy, etc.

By bridging the gap between people’s desires and realistic energy alternatives, the government could realise people’s expectation and also reduce the burden on our environmental ecosystem, but it is also important to note that operationalising, has its fair share of challenges. For example, in the United States, there is general consensus among some people that harnessing wind energy could be one of the solutions to alleviating the energy challenge. Among those who agreed, some have the Not-In-My-Backyard (NIMBY) mindset and do not want any of those power plants near their homes. 

Some cited personal health issues and environmental degradation, while others say that the construction will destroy the view from their houses and devalue the properties in the vicinity. All these concerns stand in the way of implementation and of course, I have to agree that these are indeed issues that should be addressed accordingly and dealt with properly. 

In the tropics and subtropics regions, we could be witnessing other increasingly challenging issues stemming from global temperature and carbon dioxide increase, its effect on the natural ecosystem and this might possibly disrupt the operations of hydroelectric power plants.  

Let me explain why.

As the global temperature and carbon dioxide increase, we might discover that it becomes more difficult to maintain biological control on the proliferation of aquatic weeds in many parts of the world (Baso, Coetzee, Ripley, Hill, 2021), more so in the tropics and subtropics. The tropics and subtropics region are located in parts of the world in which the sun is directly overhead at least one day of the year and is found within a band on either side of the equator from 23.5°N, and 23.5°S. These aquatic weeds can grow rapidly to cover the entire surface of lakes and rivers, some even setting deep roots and form strong lateral connections to each other as well. 

As mentioned earlier, these growing aquatic weeds might cause operational difficulties for hydroelectric power plants. It could lead to reduced throughput and eventually cause severe blockages. Hydroelectric power plants that are situated in Southeast Asia, would be at the greatest risk. Southeast Asian governments must anticipate these types of obvious problems and develop an integrated and multi-phased roadmap to tackle the upcoming challenges.  

So, do not naively assume all types of green are good. Some types of green when left unchecked, can contribute to severe environmental and commercial consequences. 

One of the problematic aquatic weeds is the water hyacinth species. This species grows very fast and some even flower under the right conditions. Many in fact think that it is very beautiful.  It  has a rapid growth rate in warm temperatures (Mitan, 2019) and can potentially cover the entire lake if left unchecked. This prevents sunlight from reaching the bottom of the lake and disrupts the lake ecosystem. In other parts of the world, local communities have tried to use pesticides to control aquatic weeds. Some tried to introduce insects such as weevils to feed on the water hyacinth to slow its growth but such methods also have its consequences.

Apart from meeting the issue head on, central and local governments could also try to mitigate the risk by transforming/ retrofitting the affected hydroelectric power plants to harness other forms of renewable and clean energy. It is more cost-effective to install alternative renewable energy devices on infrastructures that can already receive, store, transform and transmit electricity. 

Also, it is worthwhile to explore tapping on the creativity of the private sector to transform the issue into revenue-generating ideas such as collecting aquatic weeds, processing it and mixing the by-products with polymers to create fabrics that can be used for weaving garments thereby paving way for sustainable fashion. Or, the aquatic weeds could be harvested, processed and strengthened with chemicals to produce furniture thereby giving birth to sustainable furniture. Additionally, the private sector could also explore processing the aquatic weeds into edible food for humans, animal feeds and fertilisers, and export the final products to other countries (Oa, & Cf, 2015).

By including additional later stages such as breaking down these final products with pyro technology then harvesting the by-product as fertilisers (Ramirez, Pérez, Flórez, Acelas, 2021), the government, with the help of the private sector would be able to close the loop and further develop the entire idea into a circular economy. This can help to create new jobs, improve the economy and certainly goes well with the media.  

There are many ways to tackle the issue. The main enabler is to have a properly designed, integrated and multi-phased roadmap to guide the entire transition. 

References

Baso, N. C., Coetzee, J. A., Ripley, B. S., & Hill, M. P. (2021). The effects of elevated atmospheric CO2 concentration on the biological control of invasive aquatic weeds. Aquatic Botany, 170, 103348. doi:10.1016/j.aquabot.2020.103348

Oa, S., & Cf, O. (2015). Utilization of Treated Duckweed Meal (Lemna pausicostata) as Plant Protein Supplement in African Mud Catfish (Clarias gariepinus) Juvenile Diets. Fisheries and Aquaculture Journal, 06(04). doi:10.4172/2150-3508.1000141

Ramirez, A., Pérez, S., Flórez, E., & Acelas, N. (2021). Utilization of water hyacinth (Eichhornia crassipes) rejects as phosphate-rich fertilizer. Journal of Environmental Chemical Engineering, 9(1), 104776. doi:10.1016/j.jece.2020.104776

Zhang, Y., Abbas, M., & Iqbal, W. (2021). Perceptions of GHG emissions and renewable energy sources in Europe, Australia and the USA. Environmental Science and Pollution Research. doi:10.1007/s11356-021-15935-7

Photo by Pixal Bay

Written by Zeng Han Jun

As the climate continues to change, some parts of the world will become hotter and other regions will become colder. Combined with an increasing reliance on electronic devices to carry out our work and express our lives, our energy demands can only continue to grow and it will increasingly burden our existing electric grid system. 

Compounded with Work-from-home (WFH) arrangements, the matter might become worse, especially during winter/ summer. We have already been through one summer and one winter during this Covid 19 pandemic and already witnessed how it played a role in causing power outages in several regions around the world. Moving forward, we could expect to witness more power outages throughout various parts of the world.  

Office and industrial buildings are often located on the most capacious sections of a metropolitan electrical grid.  However, most residential area’s electrical grid system is generally built to support heavy consumption in the early mornings and nights, with hours to cool off throughout the day. Can residential area’s electrical grid system support WFH arrangements and perform at the same level as the electrical grid systems that are located in office areas?

Consumption patterns in cities such as New York and California have already shifted as a result of the Covid 19 epidemic, with demand peaking throughout the day. Overall use is already increasing by an average of 7% in New York City apartments (Meinrenken, 2020).

Source: Columbia University

There is no reason to believe that the changes we are seeing in New York City are not happening elsewhere. Where energy loads are predominantly residential and there is no proportionate drop in non-residential load, we should expect overall energy demands to continue to rise, with a higher risk of disruptions to current energy supply and distribution systems.

The danger of failure in aging transformers, cables, and other equipment grows when the summer heat and winter cold continue to hit new highs/ lows while heaters or air conditioners remain on throughout the day.

There are three things that household should be encouraged to do: 

1. Do an energy stock take of all the electrical appliances within the household; 
2. With the new found understanding of the energy consumption patterns, further identify the essential energy usage so that households can quickly make backup plans for those services during times of emergency; and 
3. Obtain alternative energy sources to tide over the emergency. Renewable energy sources and battery storage  must be able to provide sufficient energy for essential usages. 

Even if governments provide temporary reliefs during power outages in face of increasing/ decreasing temperature events , many companies that rely on remote workers in these regions will be affected by the reduced productivity.

As WFH arrangements continue, the oldest and most exhausted transformers and transmission equipment may be affected. Reduced commercial demand would jeopardise power companies’ revenues and, as a result, their capacity to replace outdated components in the long run, perhaps leading to widespread breakdowns in the future.

Governments must keep anticipating and prepare for possible future events and step in to work with power companies to audit the current electrical grid system. 

References

Meinrenken, C. J. (2020, April 24). New Data Suggest COVID-19 Is Shifting the Burden of Energy Costs to Households. Retrieved from https://news.climate.columbia.edu/2020/04/21/covid-19-energy-costs-households/

Photo by Maegan White

Written by Zeng Han Jun

There was a recent debate in South Korea about how solar panels are responsible for deforestation and possibly even linked to forest fires. It is not new. This argument has been going on for more than a decade but the stakes are much higher now. Investments in solar panels have been increasing steadily as energy providers try to diversify their business. Some of the oil companies are throwing significant investments into the solar business. That South Korea government unit acknowledged the report but neither agreed nor disagreed with the findings. However, the unit did share some best practices in solar panel installation, which is mainly about how the solar panels should be sloped during installation. 

To be honest, solar energy production in cities is clearly one of the many ways to reduce our reliance on fossil fuels and could be a good way to mitigate global warming by lowering Greenhouse Gas (GHG) emissions. Although photovoltaic (PV) renewable energy production has increased, questions remain about whether PV panels and PV power plants cause a “photovoltaic heat island” (PVHI) effect, similar to how an increase in ambient temperatures relative to wildlands causes an Urban Heat Island (UHI) effect in cities (Barron-Gafford, Minor, Allen, Cronin, Brooks, Pavao-Zuckerman, 2016). 

Cities are fundamentally concretised urban landscapes and the most significant impact of cities on local weather is the UHI effect. Heat islands are urbanised areas with higher temperatures than surrounding areas. Buildings, roads, and other infrastructure absorb and re-emit more heat from the sun than natural landscapes such as forests and bodies of water. Urban areas, where these structures are densely packed and greenery is scarce, become hotspots for outlying areas.

Some studies have pointed out that PV panels and PV plants change the structure of the landscape, in how incoming energy is reflected back to the atmosphere or absorbed, stored, and reradiated. Energy absorbed by vegetation and surface soils can be released as latent heat in the transition of liquid water to water vapour to the atmosphere through a process known as evapotranspiration (Masson, Bonhomme, Salagnac, Briottet, Lemonsu, 2001). PV kind of disturbs that process. So, a PVHI effect might be caused by a measurable increase in atmospheric warming as a result of a change in the balance of incoming and outgoing energy fluxes caused by the transformation of the landscape.

Research on PVHI is still ongoing while more investments are pouring into this domain. On the other spectrum, there are people who are very optimistic about this technology and even suggested using PV panels to pave roads and open space car parks. Their research has shown that PV pavement decreases surface temperature by 3 to 5 °C in summer and generates 11 to 12% less heat output at various climate conditions, all while generating electricity at the same time (Xie, Wang, 2021). 

PV technology is very important because we have an abundance of sunlight in most places but still we should not rely too much on a single energy source. It never makes sense to put all eggs into the same basket. Very cliché but I think that there is a lot of sense in that sentence. 

Given the current climate change condition, the scientific community still cannot collectively conclude how our environment will turn out in the future. Nobody dares to put a finger to it, especially when it has been discovered that climate models deviates a fair bit from real world conditions. To be fair, it is not easy to build a climate model because the climatic conditions are so complex, our mathematical models are good but there is the possibility that the math might not perform as expected when more factors come into play.  

Apart from using mathematics to forecast possible scenarios, people have also turned to observation of weather conditions on nearby planets as an indication of how Earth might turn out to be in the future. A lot of studies were performed on planet Venus in the 70s and 80s? Now, the people’s attention has shifted somewhat to the planet Mars but the scientific community are still onto the planet Venus though. Many within the scientific community agree that the study of the planet Venus could be one of the keys to understanding planet Earth’s possible future. 

First thing first, planet Venus looks beautiful from a distance but it is hellish within the planet’s  atmosphere, with surface temperatures in excess of 400 °C. Space probes sent to scout the planet, melted in an hour or two upon entering into its atmosphere. All the water had disappeared. An explanation stated that the water has broken down and the hydrogen escaped into space. Carbon dioxide and sulphuric acid are in excess throughout the planet. Quite literally a burning hell in our part of the universe. 

Some postulated that Venus used to be like Earth but later experienced a greenhouse effect. It then escalated into a runaway greenhouse effect. A runaway greenhouse effect, simply explained, is when there are too much greenhouse gases (usually water vapour) in the atmosphere which results in an increasing amount of heat trapped within the planet. The runaway greenhouse effect is most often associated with water vapour as the condensable GHG. In our case, the water vapour could reach the upper space limit of our planet Earth and escapes into space, resulting in a dried-up planet. This may have happened in the early history of Venus.

In the meantime, sea level will still continue to rise, for centuries to come. Many studies have shown that even if human-caused carbon dioxide emissions were to completely stop, the associated atmospheric warming and sea-level rise would continue for more than 1,000 years. These effects are caused in part by the residence time of carbon dioxide. The greenhouse gas can continue to stay in the atmosphere for a long time after it is emitted by industrial processes (NASA, 2017).

Flooding will continue to plague low-lying or coastal cities therefore there is a strong need to rethink urban planning and the grid system. Places with underground utility cables must reimagine how they deliver energy to houses and workplaces. Rising temperature might affect the insulation covers of the utility cables, exposing electrical wires to potential flood situations thereby causing danger to nearby humans/ animals and also pose obstacles to delivering energy to places beyond the power plant. 

We could explore siting power plants on top of individual buildings with cables delivering energy from the rooftop to respective units below. PV panels can continue to work at lower efficiency when clouds become denser and when the humidity increases. Still, we must be prepared to obtain energy from alternative sustainable energy sources, to augment the reduced output of PV power plants. 

Cities without alternative energy options will be at the greatest risk. Some of these cities are unable to harness renewable energy options like wind and hydro energy. As such, these cities must quickly pay more attention to less popular but emerging energy possibilities like hygroelectricity (converting humidity to electricity), piezoelectricity (obtaining electricity from crystals, dry bones or similar materials), etc. 

Last month, a Japanese team managed to successfully carry out an hygroelectricity experiment to power a very small motor (Komazaki, Kanazawa, Nobeshima, Hirama, Watanabe, Suemori, Uemura, 2021). I feel very encouraged by the results of their experiment. Even though the electricity output is very small compared to what PV panels can achieve, I feel that there is a lot of potential in scaling up this technology. The hygroelectricity generator could be constructed into a panel but mounted on external walls of buildings. Of course, there are still a lot of challenges ahead for this technology but I see some potential too. 

In fact, we must actively think out of the box (Very cliché, I know. We should really just do away with the box) and explore different alternative energy sources. There are significant advances in harnessing energy from sound (vibrations), heat (not geothermal), radioactivity, etc and we should reimagine how different energy sources could be wired up to a single battery station that delivers electricity to a localised building so that services could sustain even in the event of an intense and persistent flood. Of course, this is just a suggestion and there are many other ways to go about it too but first, we need to spark more conversations on this issue. 

References

(n.d.). Retrieved from https://www.epa.gov/heatislands

6 Causes of Urban Heat Islands and 4 Ways to Offset Them. (n.d.). Retrieved from https://www.buildings.com/articles/27532/6-causes-urban-heat-islands-and-4-ways-offset-them

Aggarwal, V. (2021, May 28). How Much Energy Does A Solar Panel Produce?: EnergySage. Retrieved from https://news.energysage.com/what-is-the-power-output-of-a-solar-panel/

Average monthly humidity in Singapore, Singapore. (1970, July 30). Retrieved from https://weather-and-climate.com/average-monthly-Humidity-perc,Singapore,Singapore

Barron-Gafford, G. A., Minor, R. L., Allen, N. A., Cronin, A. D., Brooks, A. E., & Pavao-Zuckerman, M. A. (2016, October 13). The Photovoltaic Heat Island Effect: Larger solar power plants increase local temperatures. Retrieved from https://www.nature.com/articles/srep35070

Evaluation of Electric Energy Generation from Sound Energy Using Piezoelectric Actuator. (2016). International Journal of Science and Research (IJSR), 5(1), 218-225. doi:10.21275/v5i1.nov152677

First Real Images Of Venus – What Have We Discovered? (2020, December 12). Retrieved from https://www.youtube.com/watch?v=Fbdojp9LTLc&ab_channel=TheSimplySpace

Hygroelectricity. (2020, June 03). Retrieved from https://en.wikipedia.org/wiki/Hygroelectricity

Komazaki, Y., Kanazawa, K., Nobeshima, T., Hirama, H., Watanabe, Y., Suemori, K., & Uemura, S. (2021). Energy harvesting by ambient humidity variation with continuous milliampere current output and energy storage. Sustainable Energy & Fuels, 5(14), 3570-3577. doi:10.1039/d1se00562f

Masson, V., Bonhomme, M., Salagnac, J., Briottet, X., & Lemonsu, A. (0001, January 01). Solar panels reduce both global warming and urban heat island. Retrieved from https://www.frontiersin.org/articles/10.3389/fenvs.2014.00014/full

Runaway greenhouse effect. (2021, July 31). Retrieved from https://en.wikipedia.org/wiki/Runaway_greenhouse_effect

Short-lived greenhouse gases cause centuries of sea-level rise – Climate Change: Vital Signs of the Planet. (2017, January 13). Retrieved from https://climate.nasa.gov/news/2533/short-lived-greenhouse-gases-cause-centuries-of-sea-level-rise/

Xie, P., & Wang, H. (2021). Potential benefit of photovoltaic pavement for mitigation of urban heat island effect. Applied Thermal Engineering, 191, 116883. doi:10.1016/j.applthermaleng.2021.116883

By Zeng Han Jun

Development of ESG criteria

Governments are increasingly incorporating Environment, Social and Governance (ESG) criteria into mandatory financial disclosures as part of their efforts to achieve net zero carbon and contribute to the United Nations’ Sustainable Development Goals (SDGs). What does this mean for businesses, though?

Over 20 years ago, ESG principles were established, primarily to support selective investment and as criteria for reporting sustainability credentials. ESG disclosures were previously voluntary. Companies used them to differentiate themselves and add value to their businesses for investors and the general public.

Following the Paris Agreement (2015), governments have implemented policies to reduce carbon emissions and contribute to the SDGs. Among these regulations is the requirement for companies to make ESG disclosures.

ESG policy to drive the nett zero transition

For example, the European Commission has published or revised regulations aimed at incorporating sustainability into its financial policy framework. Regulation 2019/2088 on sustainability related disclosures requires banks and its financial advisers to disclose ESG information to their customers, and Regulation 2019/2089 (also known as the Low Carbon Benchmarks Regulation) aims to improve transparency and consistency in low carbon indicators.

The EU Taxonomy Regulation, enacted in 2020, contributed to the establishment of an EU classification system for sustainable activities. Furthermore, Directive 2014/95 requires large public interest companies to publish reports on their environmental protection, social responsibility and employee treatment, respect for human rights, poor corporate governance and diversity on company boards.

In 2017, the Task Force on Climate-related Financial Disclosures (TCFD) issued its final recommendations on reporting on climate impacts and action. It established a framework for businesses to create more effective climate-related financial disclosures using existing reporting processes, allowing for more reliable cross-market comparison.

New Zealand was one of the first countries in 2020, to commit to mandatory climate risk disclosures that are aligned with the TCFD recommendations for publicly traded companies, large insurers, banks, and investment managers.

The 2019 Streamlined Energy and Carbon Reporting Regulation (SECR) in the United Kingdom also introduced mandatory disclosures related to energy consumption, greenhouse gas (GHG) emissions, and energy efficiency actions for selected companies as part of their annual reporting.

Singapore also published its sustainability reporting framework in 2021, with climate disclosures playing an important role in transforming finance for a greener future. Singapore has been building the green bond market for years, including under a “Sustainable Bond Grant Scheme” from 2017 that has propelled the issuance of almost USD$8.3 billion in green, social, and sustainability bonds. That included a $1.1 billion set of green bonds issued in 2020 by Star Energy Geothermal Group, used in part to finance geothermal energy generation facilities in West Java, Indonesia.

The impact of mandatory ESG disclosures on businesses

Companies will face increased scrutiny regarding the sustainability of their activities in the future, as well as due diligence, with ESG criteria serving as a key requirement for investment decisions. Companies must measure and manage their environmental and social impacts, as well as have in place a governance structure to support this, in order to comply with mandatory ESG disclosures.

Although this may be overwhelming for some businesses that have not yet embarked on the sustainability journey, focusing on these aspects now can help businesses mitigate future compliance and climate risks. Companies should view incorporating ESG criteria as an opportunity to improve their businesses, create positive impacts in their value chains, and improve investor relations, not just any desktop exercise.

Companies should evaluate their businesses and create a roadmap for incorporating ESG criteria into their operations. While this will almost certainly necessitate short-term investments, it would almost certainly provide long-term value. Some research have showed that companies that have incorporated ESG into their operations consistently outperform their peers and may even benefit from lower-cost financing. Investors, for example, are becoming more aware of the risks that climate change can impose on traditional financial assets, and they may be willing to accept a lower return on investments linked to more sustainable activities.

What comes next?

Businesses should begin to think how they should embark on their ESG journey and gradually adapt and prepare for the more stringent disclosure regulations. They must also anticipate the higher level of rigor that investors and financiers will emphasis during due diligence. Integrating sustainability into corporate practices and reporting today would ultimately increase business value and allow businesses to contribute to a more sustainable future.

By Zeng Han Jun (hjzeng@alumni.harvard.edu)

The sudden emergence of the Covid-19 pandemic has transformed the way that many of us perceived issues like working arrangements, commute options, housing needs amongst others. Still, the fundamental needs for affordable housing, environmental, social and governance (ESG) awareness and actions remain part and parcel of modern life in and beyond the cities. Governments, together with the Non-Government Organisations (NGOs) and private sector must embrace an open and collaborative approach to tackle some of the most challenging issues of our times, for example, the provision of a sustainable urban environment that allows for healthy socio-economics dynamics. 

From what I have seen, learnt and discussed with various organisations, I firmly believe that two important foundations were put into action during the Covid-19 period that could empower collaborative actions towards sustainable urban development and growth in the Southeast Asia region.  

First, the Southeast Asian countries came together and signed the Regional Comprehensive Economic Partnership (RCEP), which is a free trade agreement between the ten member states of the Association of Southeast Asian Nations (ASEAN) and its six Free Trade Agreement partners i.e. Australia, China, India, Japan, New Zealand and Republic of Korea . ASEAN comprises countries like Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

The RCEP marks ASEAN’s biggest free trade pact to date, covering a market of 2.2 billion people with a combined size of US$26.2 trillion or 30% of the world’s GDP. While it is largely being perceived as an economic partnership, studies have shown that the economy does affect the environment to a certain extent, which is why there are growing interests in promoting and activating the circular economy model to enable more sustainable and environmentally-friendly growth. 

With the RCEP, quotas and tariffs would be eliminated in over 65% of goods traded and this might improve market access. Business dealings would be made predictable with common rules of origin and transparent regulations which is always one of the top concerns for any potential investors. Apart from this, it also presents an opportunity to shape business policies to be more in line with environmentally-friendly practices and equitable social growth. A more holistic approach would encourage more firms to invest more in the region, including building resilient supply chains and services that could mitigate ESG-related risks and generating jobs that are grounded on strong meritocratic principles. 

Second, city mayors are stepping up with their experiences in working with international organisations on ESG-related projects. For example, Pasig City Mayor Vico Sotto from the Philippines, stepped up to initiate the ‘mobile market’ where city residents could purchase fresh goods right from their vicinity. This initiative encouraged people to stay home as the ‘mobile market’ is accessible. This reduced logistics transportation thereby reducing carbon emission and also helped in activating the local market. These upcoming mayors are well-positioned to understand the benefits of responding to global trends and commitments such as climate change, changing human behaviors and other ESG-related issues. 

Some of the more progressive countries within the Southeast Asia region, have emphasised on underpinning their forward policies with the sustainable development pillars. Cities must continually keep up and work towards creating a place to live, work and play and this has clearly become an even more important concept during the Covid-19 pandemic. During the pandemic, many already observed that global talents can continue to contribute productively from anywhere in the world therefore, do not really have the need to seek out places for work. To attract global talents, the main differentiator would be to create an environment that has high quality of life and also be climate-risks resilient. 

Apart from this, the attention is also once more again on urban areas and the mixed-use planning of these locations. Studies have also shown that people’s travelling behavior has changed under the lockdowns that were imposed during the Covid-19 pandemic. Demand for travel has reduced and that people will travel less by public transport. Walking and cycling can be important ways to maintain satisfactory levels of health and well-being. This will change the way urban planning is traditionally planned and unfolded. This entails a discussion with urban planning professionals and other stakeholders on urban density, open spaces and the demand for affordable housing.

My work with planners and finance firms from the region and beyond, revealed that there is a growing interest in the terms “Resilience” and “Climate Risk” and it is mainly driven by issues stemming from climate change. One common topic is to develop strategies to sustain the functioning of urban communities, business operations, supply chain operations amid stresses and disruptions that might occur due to climate change. A good number of cities around the globe are improving in this area and more Southeast Asian cities should certainly do more in this area too.  

Sustainable urban development is no easy task. Execution requires coordinating and communicating with stakeholders who sometimes do not see eye-to-eye on certain issues and it calls for a lot of skill and persistence to pull projects through. This is especially so for places where the administration has to take into consideration the rural areas and smaller communities, and how these communities seamlessly integrate with the changes of the urban and major cities.  

Keeping sustainable urban development on track entails setting out clear guidelines with hawkish monitoring. The mantra is to adopt a Whole-of-system approach whereby all arms of urban development work hand-in-hand and not against one another, while keeping the big picture in mind. Uninterrupted lateral and vertical communication is one of the key enablers to actualising the Whole-of-system approach, with proper mechanisms in place to review and adapt to new information. New information may sometimes require novel adaptation and is absolutely critical to fostering a city that flourishes.  

Sustainable urban development is not the only option moving forward but with many environmental indicators trending south at the moment, it could be the only logical pathway to Southeast Asia region’s future. 

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References

(n.d.). Retrieved from https://www.msn.com/en-ph/entertainment/entertainmentnews/mayor-vico-sotto-earns-admiration-due-to-his-global-recognition-as-one-of-the-anti-corruption-champions/ar-BB1dYYMW

ASEAN hits historic milestone with signing of RCEP. (2020, November 26). Retrieved from https://rcepsec.org/2020/11/26/asean-hits-historic-milestone-with-signing-of-rcep/

Morais, L. H., Pinto, D. C., & Cruz-Jesus, F. (2021). Circular economy engagement: Altruism, status, and cultural orientation as drivers for sustainable consumption. Sustainable Production and Consumption, 27, 523-533. doi:10.1016/j.spc.2021.01.019

UNUniversity. (n.d.). How Cities in South-East Asia Are Acting on the SDGs Ahead of Their National Governments. Retrieved from https://ourworld.unu.edu/en/how-cities-in-southeast-asia-are-acting-on-the-sdgs-ahead-of-their-national-governments

Vos, J. D. (2020). The effect of COVID-19 and subsequent social distancing on travel behavior. Transportation Research Interdisciplinary Perspectives, 5, 100121. doi:10.1016/j.trip.2020.100121