You’re already feeling the heat. You read of devastating floods, horrific hurricanes, crops being destroyed by extreme weather fluctuations…

You know the race to mitigate the fallout of climate change is both urgent and important. You believe, like most experts, that the solution is for the world to achieve net-zero emissions by 2050. 

On Monday, UOB announced plans to meet such a bold target. It seeks to fulfil this by first focusing on six sectors that contribute heavily to greenhouse gas emissions: power, automotive, oil and gas, real estate, construction and steel.

“The net zero by 2050 goal is actually quite ambitious because there's a lot of work that needs to be done in terms of revamping how we live, work, play,” says Mr Eric Lim, chief sustainability officer at UOB.

Why is UOB stepping up? To better understand the urgency, here are the answers to four key questions:

What is net zero?

The theory: Net zero refers to bringing greenhouse gas emissions to as close to zero as possible, achieved when man-made emissions are balanced by removals over a specified period.

The reality: On a global scale, achieving net zero is unprecedented. A recent report by the World Meteorological Organisation states that atmospheric levels of three main greenhouse gases reached record highs last year. 

While greenhouse gas emissions dipped in 2020 due to the pandemic, it has increased steadily since 2015, according to International Monetary Fund numbers.

To achieve net-zero emissions by 2050, global greenhouse gas emissions must be halved from 50 gigatons by 2030.

Why should we bother?

Greenhouse gas emissions contribute to global warming, which is likely to exceed a global average temperature of 1.5 deg C should no action be taken. The benchmark is part of the long-term goals of the Paris Agreement to limit global warming, with the current global average at 1.1 deg C.

While Singapore is mostly protected from natural disasters, it will be at the mercy of rising temperatures and sea levels.

“Everybody needs to deal with the immediate challenges in life, before they can start thinking about longer-term issues,” says Mr Lim, 48. “That being said, we're really starting to see real issues that will affect our lives today.” 

He adds that climate change is a threat multiplier. “If we get an unpredictable increase in temperatures, it can lead to the disruption of various ecosystems. This can have severe effects on our food supply and security, leading to higher prices and fewer choices.”

Rising sea levels are also a cause of concern as Singapore is a low-lying island. About 30 per cent of the island is less than 5m above the mean sea level. Last year’s report by the Intergovernmental Panel on Climate Change states that sea levels could rise by as much as 1m by 2100.

“As sea levels rise, rice supplies will be compromised. Farmers across South-east Asia will face challenges with production due to reduced crop yields,” adds Mr Lim.

Rising temperatures will also intensify the heat outdoors. In a parliamentary reply in August, Minister for Sustainability and the Environment Grace Fu said that days with peak temperatures of 40 deg C may appear as early as 2045. This is based on the projected average temperatures rising by 1.4 to 4.6 deg C by the end of the century. 

Mr Lim says: “At the end of the day, whether within our lifetimes or in the next generation, society will suffer from the negative effects. If we don’t take action now, when will we ever start?”

For businesses that have yet to make net-zero commitments, Mr Lim has this advice: Transform to stay ahead.

“The direction that the world is going is clear – a more sustainable and low-carbon world. If you don’t transform your business model to fit in a competitive environment, a more sustainable offering or business will replace you.”

Businesses will also face challenges down the road when navigating government policies and regulations, such as the Carbon Pricing Act, that are geared towards decarbonisation efforts. 

At this year’s Budget speech, Finance Minister Lawrence Wong announced that Singapore will raise the carbon tax to align with net-zero ambitions. This will increase from $5 per tonne today, to $50-$80 per tonne by 2030.

Where are we now?

While the 2050 goal is ambitious, Singapore has made headway in the green transition.

Last year, the Government launched the Singapore Green Plan 2030 to advance the sustainability movement and align with international decarbonisation efforts, with key targets charted across various sectors.

“It's important to understand that there will be some things that are more obvious to the person on the street, and some that are less obvious,” says Mr Lim.

For example, electric vehicle (EV) ownership jumped from 12 in 2016 to 314 the following year, based on numbers from the Land Transport Authority. Last year, EV ownership was almost 3,000.

Mr Lim cites reasons such as the increased investment in the EV ecosystem and charging infrastructure that has raised interest among consumers.

In March, Minister for Transport S. Iswaran shared that EV charging points will be installed at nearly 2,000 Housing Board (HDB) carparks over the next three to four years. As part of the Singapore Green Plan, the goal is to make every HDB town EV-ready by 2025.

Another example of “less obvious” progress is in electricity, and the switch to renewable sources.

“Most Singaporeans won’t know where their energy comes from. Today, most of our energy comes from liquefied natural gas,” says Mr Lim.

“As Singapore progresses on being able to increase renewable capacity, and import renewable energy, it will still feel the same to the man on the street, but it’s actually a very powerful and meaningful way in which the country is decarbonising.”

How do we get there?

To reach net-zero emissions by 2050, 50 gigatons of greenhouse gas emissions must be removed from the atmosphere, says UOB, equivalent to removing one billion petrol-powered cars from the roads for a year.

This will require an estimated investment of US$100 trillion (S$141.32 trillion), and effort from multiple stakeholders such as governments, the financial services industry, investors and consumers.

“We need a whole-of-system approach to reach this goal,” says Mr Lim.

“Governments need to set the national strategies and the right regulations, the real economy needs to take that leap to decarbonise, and the financial services industry must absolutely do our best to support the transition with our capital and financing.”

UOB’s role also extends across the region. Mr Lim shares that South-east Asia stands to lose more than 35 per cent of its gross domestic product to the effects of climate change by 2050.

Individuals, too, play an important role. Their consumption habits can, directly and indirectly, impact greenhouse gas emissions.

For example, Mr Lim says that over 30 per cent of food produced ends up in landfills or waste. The carbon emissions from the use of agriculture and supply chain logistics are essentially wasted.

When it comes to purchases, the choices consumers make will also encourage businesses to adopt sustainable practices.

“Through our voices, our preferences, our consumption habits, we actually send very strong signals, right to the corporations that produce products and services, that there is demand for sustainable products as well as innovation.”

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