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“The world’s most disaster-hit region” was the stark verdict of the World Meteorological Organization on Asia, in a recent report on climate.
And the WMO was just as emphatic about what was to blame for the deadly heatwaves, storms, droughts and floods that hit the region in 2023 — its second-hottest year on record. “Climate change exacerbated the frequency and severity of such events,” said secretary-general Celeste Saulo, adding that it “profoundly impact[ed] societies, economies, and, most importantly, human lives”.
Yet, even while Asia grapples with the impacts of global warming, the region’s largest economies continue to pump out large volumes of the greenhouse gases that scientists say are the main drivers.
China accounts for nearly a third of global GHG emissions, with India, Indonesia and Japan also in the global top 10. According to the International Energy Agency, China’s energy-related carbon dioxide emissions increased by 4.7 per cent last year, and India’s by just over 7 per cent — compared with a 4.5 per cent fall in the world’s advanced economies, to a level last seen in the early 1970s.
So the businesses in this third list of Asia-Pacific Climate Leaders — compiled by the Financial Times and data provider Statista — have faced stiff headwinds in their efforts to curb emissions. Extreme weather and carbon-intensive economies make a challenging task still harder.
As in previous years, the Climate Leaders list focuses primarily on companies that achieved the greatest reduction in their Scope 1 and 2 greenhouse gas (GHG) emissions intensity over a five-year period.
Scope 1 and 2 emissions — “core emissions” in the table — come respectively from a company’s own operations and from the energy it uses, while intensity is defined as tonnes of emissions of CO₂-equivalent per $1mn of revenue.
Other factors are considered, too, such as companies’ transparency on Scope 3 emissions, which arise elsewhere in their value chains, and their collaboration with sustainability assessors, such as CDP and the Science Based Targets initiative (SBTi). These factors are assigned a score, which is combined with the reduction in emissions intensity figure to produce an overall total for each company.
The editors reserved the right to exclude companies if their broader environmental record — on non-GHG pollution, for example, or deforestation — was sufficiently disputed to undermine any claim to be a “climate leader”. Energy companies prospecting for new fossil fuel reserves fell into this category.
Further details of the methodology can be found in the panel at the end of this article and on Statista’s website.
Japanese professional services company NTT Data is this year’s highest scorer, followed by Hong Kong-based New World Developments and Japan’s Nomura Research Institute.
As in 2022 and 2023, Japan dominates the list, with 54 per cent of companies this year. It is followed by Taiwan and Australia, which each account for 11 per cent. The best-performing sector is technology & electronics, with 20 per cent of companies, followed by financial services, with 10.6 per cent — much the same pattern as the two previous editions.
Though 350 Asia-Pacific Climate Leaders are listed this year, compared with 275 in 2023, this year’s lowest score, 54.2, is higher than last year’s. That is an encouraging development, but it is important to bear in mind that the methodology has several shortcomings.
It prioritises Scope 1 and 2 emissions because it is mandatory to report these, so data is both readily available and comparable. Companies’ Scope 3 emissions are typically far greater but, because reporting remains voluntary and there is no standard metric, definitive comparisons are harder to make — hence the focus on transparency instead of absolute numbers.
And because the intensity calculation is based on emissions relative to revenue, some rapidly growing companies on the list actually increased their absolute emissions over the five-year period. So, this year, we have factored performance on cutting absolute emissions into the scores, for the first time.
Nevertheless, some of the key data this research relies on — companies’ own carbon accounting, plus information submitted to CDP — may be flawed, either due to inconsistent emissions figures or insufficient detail on carbon offsets. To help compensate for this, the figures reported for 2017 and 2022 by some of the biggest emissions cutters, both in terms of intensity and absolute emissions, have been scrutinised by GreenWatch — a sustainability research team based at University College Dublin. Its findings have been added to the table as footnotes.
Overall, Asia — despite being the highest carbon-emitting continent — is making some headway in the fight against climate change. For example, for all its reliance on carbon-intensive coal power, China leads the world in solar and wind power installation. Some analysts think this may help explain a 3 per cent year-on-year fall in carbon dioxide emissions in March 2024 — a development that has prompted speculation about 2023 marking the peak for China’s CO₂ emissions.
However, as scientists point out, more GHGs will only exacerbate climate change, leading to more extreme weather events. Last month, for example, temperatures in New Delhi exceeded 49C, setting new records. The pressure on more companies to become Climate Leaders looks set only to intensify.
A print and online report on the Asia-Pacific Climate Leaders 2024 will be published on June 21, containing articles analysing the issues that this research raises
Read the full article here