Monday, 4 May 2015

The Greening of Asia: The Business Case for Solving Asia’s Environmental Emergency

In the absence of scepticism, readers are left with a suspicion that there might be ‘greenwashing’

Asia’s great waterways — from the mighty Yellow river to the holy Ganges — are sullied by industrial waste and human sewage. China alone burns nearly half the coal consumed on the planet each year; it is now the world’s largest emitter of greenhouse gases. Cities including Beijing and New Delhi are choking on lethal levels of air pollution.
Yet the corporate response in emerging Asia has been largely confined to multinationals belatedly importing green practices from the west and Japan.

While they may lack originality, such efforts are important. “Asia is approaching a moment of systemic — in some cases existential — crisis,” writes Mark Clifford in The Greening of Asia. How Asia responds “will determine whether the region will continue along its unmatched path of growth or descend into an increasingly unliveable dystopia”.
A former journalist who is now executive director of the Hong Kong-based Asia Business Council, he examines important sectors — electricity, building efficiency, transport, water and forestry — and in doing so tells the stories of pioneering Asian entrepreneurs who have started to go green.
Clifford argues that the companies they run are not engaged in public relations “greenwashing”, or even primarily in philanthropy or corporate social responsibility. Instead, the likes of Esquel, one of the world’s biggest shirtmakers; CLP, the Hong Kong power utility; Hyflux, the Singapore water treatment group; and BYD, the Chinese battery and electric vehicles company; are innovating to produce “hard-headed business responses” to tackle environmental problems.

He is right about motivation. Smart business owners like to save money by cutting energy and water use where they are expensive. They also know they need a “social licence” as public opinion evolves in an increasingly well-educated continent. Esquel reckons its projects to save energy or water pay for themselves on average in less than three years — and in at least one case in just two months.
He is less right about innovation. Few of the management practices or technologies he describes — from water recycling to photovoltaic solar panels — are new to Asia.
Fortunately, the paucity of innovation does not matter much in dealing with the environmental crisis, provided Asian companies adopt best practices developed elsewhere. Take the neglected topic of building efficiency: Clifford says construction and usage account for about 40 per cent of global energy consumption — in Hong Kong, the figure is 90 per cent — while no fewer than 46 of the 50 tallest buildings under construction in mid-2014 are in Asia. What matters is how efficient they are, not whether the solutions are new.
Asia’s contribution to saving the planet, in fact, has not been in innovation but in the massive application of old-fashioned Chinese over-investment to renewable energy businesses, especially in solar panels and wind turbines.
In just over a decade, China spent nearly $50bn to build the world’s biggest solar manufacturing industry, and by last year there were more than 500 Chinese solar manufacturers — as many as in Europe, the US, Japan, South Korea and India combined. That was disastrous for the profitability of early corporate successes such as China’s Suntech, but helped to spread low-cost solar power across the globe from India to Germany.
Clifford is an astute analyst of the financial dilemmas at Asian companies that are either in “green” businesses or have visionary owners, as at Esquel and CLP, who want to adopt environmentally sustainable policies.
Yet his discussion of corporate environmental successes is not matched by detailed examination of omissions and failures — which are as abundant in Asia as anywhere, and provide useful lessons for business.
To do justice to the corporate champions of Asian environmentalism he interviews, he should give space to environmentalists and others who might challenge their claims. In the absence of such scepticism, readers are left with a suspicion — however unjust — that there might be a lot of greenwashing going on after all.


- Mark Clifford

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