APAC risk managers must gear up for increased climate reporting

Eco-consciousness in Asia Pacific is on the rise, leaving the region prepped to make increasingly sustainable choices.

This is likely to be demonstrated by further government policy and infrastructure investments to solve climate-related issues.

Some 64% of APAC respondents in a survey by Deloitte strongly believe climate change is an emergency, while 52% said they had changed their activities or purchase behaviours to respond to climate concerns.

Deloitte surveys consumers biannually from across 23 geographies about their environmental awareness and belief that climate change is happening.

The company’s Global Sustainability Actions Index provide insights into the current state of eco-consciousness amongst the Asia Pacific population.

It found that climate change is exacting a heavy cost on the APAC region. However, it also found that people in the region are aware of those impacts and ready to further take action.

Based on the data, one-third of APAC respondents have experienced extreme heat within the past year.

The data also indicates that severe flooding has affected 130 in 1,000 people, while severe drought has affected 160 in 1,000 in the last six months.

What does it mean for risk managers?

There are two major considerations for risk managers in the region and those with interests in APAC.

Firstly, are the risks around the practical implications of conducting business and working within the region. Changes in the climate and related events are making it increasingly difficult for organisations.

As the Asia-Pacific region continues to witness a series of climate-related disasters, analysis conducted by the Deloitte Economics Institute, indicates the compounding effects of these worsening environmental events could create a drag on the region’s productivity, public spending and economic growth, amounting to as much as US$96 trillion in lost GDP by 2070.

Secondly, are the environmental, social, and governance (ESG) developments which are likely to be implemented as a result of the APAC region’s increased focus on ‘ eco-consciousness’.

For many risk managers, dealing with ESG issues has become a core function which is only likely to increase.

Retailers and leaders in the consumer market are also establishing new benchmarks for transparency and sustainability across their value chains, while suppliers are being encouraged to disclose carbon emissions, material choices, and internal ESG practices, which are integrated into sustainability reports, product labelling and brand communications.

What next?

Climate change is a lived experience for people in Asia Pacific – more so than any other region in the world.

Risk managers in the region must respond to the fact that consumers across APAC are showing higher levels of motivation, willingness, and eco-consciousness.

Governments in the Asia-Pacific region have taken the lead in recognising climate change as an existential threat and have initiated time-bound, national-level legislation to achieve net-zero targets.

Many these will impact risk managers directly, so risk managers should start preparing now.