SINGAPORE – Companies will have to react quickly and set achievable green goals if they are going to thrive amid economic uncertainty and climate change, said business leaders.

While those green aspirations are important, ambitions cannot be detached from reality, noted Mr Andreas Sohmen-Pao, chairman of maritime company BW Group.

Mr Sohmen-Pao told a panel discussion here on Thursday: “There has been a lot of focus on target setting recently and this year. We had a robust debate on the International Maritime Organisation, which led to an increase in the emissions target for the shipping industry.

“By 2030, we will have to reduce greenhouse gas emissions by 20 to 30 per cent compared to 2008; I have doubts that the 2030 target is achievable.”

Emissions need to be reduced by 45 per cent by 2030 and reach net zero by 2050 to keep global warming to no more than 1.5 degrees, as called for in the Paris Agreement, a legally binding international treaty adopted in 2015.

Mr Sohmen-Pao said the shipping industry will need up to 40 per cent of all available green fuel to meet emissions targets in 2030.

“To get to zero, we will need all the renewable energy in the world, and the fuel will cost three to six times what it costs now,” he added.

“Stretching goals are good, but the problem with stretching goals too far is that people will stop following the goals at some point as the aspirations become divorced from reality.”

The panel discussion was part of Asia Future Summit 2023, a two-day conference held at The Ritz-Carlton, Millenia Singapore that featured around 20 local and international speakers, and 300 or so delegates, including representatives from the public, private and people sectors.

The conference took place amid the birth centenary of Singapore’s founding prime minister Lee Kuan Yew, and covered topics such as finding balance amid geopolitical tensions, and forging new paths amid societal shifts.

Schneider Electric chairman Jean-Pascal Tricoire said at the event that energy is a global challenge, and the only way to resolve it is to work across borders, adding: “Digitalisation is our best shot to resolve the big energy conundrum.”

Being able to adapt to changes is also crucial for companies and their leaders, said Mr Narayana Murthy, founder of Indian tech giant Infosys.

Mr Murthy noted at a panel discussion: “We must accept that change is here to stay. Handling these changes requires us to become more open-minded, study new technologies and the new geopolitical situations that are coming.

“It is the role of organisation leaders to prepare their employees to handle these changes.”

Another necessary step for companies’ sustainability journeys is collaboration, said Mr Sohmen-Pao, who added that this is difficult as everyone has different opinions, emotions and perceptions.

“But tackling something as big as climate change needs the public and private sectors to work together. The private sector depends on regulatory support, while the public sector needs the agility and creativity of corporations,” he added.

Fellow panellist Frederick Chavalit Tsao, chairman of IMC Pan Asia Alliance Group, agreed, noting that those who can collaborate with their environment will flourish.

Former JSR Corporation chairman Mitsunobu Koshiba told a separate panel discussion that governments and corporations in the region need to develop intelligence within their organisations to understand how geopolitical balance changes over time and how to extrapolate today’s situation into the future.

He said this intelligence would allow them to create options, and eventually capture the growth opportunities that become available.

OCBC chief executive Helen Wong agreed, noting the need and ability to both create options and capture opportunities.

However, she felt that there were two other elements to keep in mind. “The first is to make sure we keep up with technological advancements, which will only accelerate over time, and the other is to make a commitment to play a positive role in climate change, which can only get worse if nothing is done about it,” she said.

“We then have to make sure that our people are all moving in the same direction, while dealing with all that uncertainty.”

• Additional reporting by Colin Tan

The Asia Future Summit is an inaugural collaboration between The Straits Times, Lianhe Zaobao and The Business Times. 

• OCBC is the presenting sponsor for the Asia Future Summit 2023. The event is also supported by GuocoLand and Kingsford Group.