Horrific extreme weather events such as heatwaves, droughts, fires, thunderstorms, flash floods and hailstorms in various parts of the US, UK, Italy, Spain, France, Germany, Austria, Pakistan (the worst hit), New Zealand, India, Sudan, China and other places this summer are warning signs that the climate planetary boundary is close to reaching its tipping point.
Six of the 15 potential climate-related tipping elements that scientists of the Intergovernmental Panel on Climate Change (IPCC) of the United Nations have identified are vulnerable. A warming of 1.5 degree Celsius, just four tenths of a degree warmer than now, would trigger four of the factors and set off the self-propelling process. Climate risks are already looming over the world.
A rise in the sea level would put a substantial part of Asia’s coastal areas under water. In Hong Kong, this would cripple the Mass Transit Railway (MTR) Island line and render prime waterfront properties inaccessible. Those with electricity-generating systems in basement rooms risk having no power to operate. The value of these assets could be severely slashed. Flash floods would sweep away infrastructure, houses, and people, resulting in huge insurance claims and premiums to rise, if coverage were even available. Intense heat would make working outdoors highly risky to people’s health.
Major greenhouse gas-emitting companies face transition risks due to the implementation of a carbon tax, changed customer preferences, technological shifts, as well as legal and reputational implications. Decarbonization would be the only option to mitigate future climate risks, with non-action leading to astronomical costs both to businesses and the economy in the decades to come.
Although the Hong Kong Exchanges and Clearing, or HKEX, has raised environmental, social and governance (ESG) and climate disclosures requirements and provided online education on sustainability, listed Hong Kong companies, except for a handful of trailblazers, have moved at a snail’s pace in taking action to address climate risks.