The Green Way to Post-Covid Recovery

The Green Way to Post-Covid Recovery

by | Apr 14, 2022 | Carbon Footprint Assessment

The GREEN WAY TO POST-COVID RECOVERY

Green Financing and Green Sukuk

As governments forge ahead to rebuild economies that were devastated by the pandemic in recent years, the concept of green financing was propelled to the forefront of inclusive recovery. This evolves from the global sentiment that seeks to ensure that, this time around, no one is left behind in the collaborative efforts towards global peace and development.

Following the historical COP26 summit in Glasgow in November 2021, the 11 countries within the Association of South East Asian Nation (“ASEAN”) region was fortunate to be endowed with the Green Recovery Platform. With a pledge of $665 million from four entities including the government of the United Kingdom, the platform was organized to accelerate ASEAN’s post-Covid recovery through low-carbon and climate resilient infrastructure projects. With almost 50% (US$300 million) of the funding to be forked out by the Green Climate Fund, opportunities are ripe for Green Sukuk – the Shari’ah compliant investments in renewable energy and other environmental assets. Green Sukuk forms part of Islamic Green Finance which includes green bonds and carbon finance.

Credits: sukuk.com

The World Bank considers green sukuk as “a unique capital market instrument merging green and Islamic finance.” This financial instrument shares similar features with the conventional sukuk or Islamic bond which primarily requires compliance with Shari’ah principles, except that the proceeds of a green sukuk can only be used to fund environmentally-friendly projects.

Green financing through Sukuk issuance entails tremendous growth opportunities for Malaysia, having pioneered the first green sukuk issuance in 2017 through the Sustainable and Responsible Investment (SRI) Sukuk Framework spearheaded by the Securities Commission. To date, Malaysia still maintains its dominant position and market share by almost 50% compared to next in rank, Saudi Arabia.

As the undisputed leader in the US$2.2 trillion global Islamic finance sector[1] and strongly supported by a proven and reliable regulatory framework, the truly Asian country is uniquely positioned to lead ASEAN in rebuilding the post-pandemic green, inclusive and sustainable world for the present and the future generations.

  1. https://www.reuters.com/business/finance/global-islamic-finance-forecast-grow-main-markets-recover-sp-2021-05-03/ ?
Clearing the Path to Net Zero – Carbon Footprint Assessment

Clearing the Path to Net Zero – Carbon Footprint Assessment

by | Mar 29, 2022 | Carbon Footprint Assessment

The global greenhouse gas (“GHG”) emissions have risen to unprecedented levels. Without drastic action to reverse this trend, the consequent rise in global temperature could lead to catastrophic weather phenomena and climate events.

Both public and private sectors have a role to play in minimising GHG emissions and mitigating the effects of climate change. In December 2015, the international community signed the Paris Climate Agreement, pledging to limit the average global temperature increase to below 2°C. This was reiterated in November 2021 in Glasgow.

Before the Flood - The Promise of Paris

Source: https://www.beforetheflood.com/explore/the-solutions/the-promise-of-paris/

COP26 in Glasgow saw new commitments by world leaders to mobilise the private sector in the fight against climate change, as well as set Net Zero Carbon Footprint as a core principle for businesses. Governments are likely to emphasise on establishing a decarbonisation strategy for companies which involves laying the foundation for governing carbon markets and trading system.

COP26: Glasgow Pact Criticised for Keeping Mum on Who Should Pay and How Much

Source: https://thewire.in/environment/cop26-glasgow-climate-pact-damages-fossil-fuels

What is carbon footprint and why does it matter?

A corporate carbon footprint is the calculation of GHG emissions – direct and indirect – generated by a company’s value chain, including all emissions for a specific period of time.

Calculating a company’s carbon footprint serves several purposes, such as

  • Transparency about its own emissions
  • Identifying climate-related risks and opportunities
  • Demonstrating to stakeholders the company’s seriousness to pursue climate-related initiatives.

Carbon Footprint Assessment

Carbon dioxide is considered the main GHG as it is far more abundant in the atmosphere and the main contributor to environmental hazards. Businesses can contribute to the climate agenda by conducting a carbon footprint assessment which measures the total amount of GHG emissions at different stages of a company’s value chain. ISO 14046:2014 (Environmental Management – Water Footprint] and GHG Protocol are the most widely recognised standards utilised by corporations for quantifying their GHG emissions. The GHG Protocol categories carbon emissions into three main scopes as illustrated below.

clearing the path to net zero Picture3

Leading the Path to Net Zero

clearing the path to net zero Picture4

Completing the carbon footprint assessment is only part of the equation. Through the assessment, businesses can evaluate areas of concern within the company where carbon emissions are significantly higher than usual. However, there is a limit to the amount of emissions that can be mitigated within the business operations.

To achieve net zero emissions, companies must take a proactive role in leading their stakeholders, as well as the entities involved in their supply chains and the communities within which they operate, to consciously choose to reduce their carbon footprint, thereby clearing the path towards net zero.