68 6 Financing the Climate Transition Private sector perspectives Banking The Bank of East Asia, Limited (BEA) is a Hong Kongbased home-grown bank.13 BEA’s ESG vision was to be a leader in Asia. Success would require an enabling culture of sustainability that inspired staff to contribute, and long-term success depended on meeting the diverse expectations of stakeholders and in BEA’s environmental and sustainability performance. A staff survey in 2022 showed 85% of the staff felt they could make a difference on BEA’s ESG performance, and 90% believed in the company’s sustainability commitment. The learning curve was steep in developing internal capabilities in carbon risk management and green finance. A key challenge for the bank was its Scope 3 emissions, which were around 1,000 times greater than the bank’s own operational emissions – 90% of those emissions arose from BEA’s corporate lending and bond investment business. Other challenges included the lack of accurate Private Sector Perspectives Zoey LAU GM & Head of People and Sustainability, The Bank of East Asia, Limited Charles TSAI CEO, Power Assets Holdings Limited Aldous MAK CFO, Hong Kong Science and Technology Park Daniel CHENG MD, Dunwell Group Frederick LONG Founding MD, Olympus Capital Christy YEUNG Head of Fintech and Green Finance Projects, School of Business Management, HKUST Moderator: Simon NG Chief Executive Officer, Business Environment Council Zoe Lau, BEA emissions data from its client base, many of whom were nonlisted smaller companies. Nevertheless, BEA had been able to set climate timeline and targets to meet Net Zero operation emissions by 2030 and Net Zero financed emissions by 2050 and for roadmaps to start in 2023. BEA would set reduction target in the high carbon sectors (starting with energy and utilities) by 2025. In 2022, BEA expected 10% of its corporate loans and bond investments would be green. Moreover, BEA would provide new capital in technology to help expedite the Net Zero transition. The energy business Sustaining profitability long-term was a challenge for any company. For an energy company, such as Power Assets Holdings Limited,14 with highly regulated businesses around the world, decisions needed to be taken to navigate a variety of difficult questions to ensure long-term profitability. For example, scheduling the repurposing of gas pipes to carry hydrogen, accommodating interruptible renewable energy and even EVs (electric vehicles) in the energy system, and automating and digitalising the infrastructure. Yet, decisions could not all be in one direction because there would be multiple volatilities depending on locations, demand/ supply, prices, and politics that all present risks. Moreover, uncertainties abound in the climate change era, including the outcomes of COPs and government regulations, as well as whether the world could hold to 1.5°C or tip to runaway warming at 4°C, which could mean businesses might become uninsurable and non-financeable. Hence, business must take a long, holistic and sustainable view of the future in their decisions, and all stakeholders need to collaborate. Ultimately, it would depend on what people might be prepared to do to change their habits and way of life to reduce their carbon footprint. Charles Tsai, Power Assets Holdings Limited
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