As a market researcher at Toyo Seikan Group[1], Ms Ribella Lee specializes in market research and business value creation on future trends and topics. This article will focus on her perspective on the impact of COP26 on the future direction of the business ecosystem in the sustainability sector in Japan and Singapore.
The second half of 2021 saw an important global conference, the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26). It is a conference that many believe to be the best and last global opportunity to curb runaway climate change, according to the United Nations Climate Change Organization.
The conference saw the attendance of over 100 countries coming together to discuss, negotiate and implement stronger domestic climate policies that will help the world avoid harsher climate impacts. It is the continuation of the Paris agreement (25th Conference of the Parties to the United Nations Framework Convention on Climate Change), whereby countries agreed to work together to limit global warming to well below 2 degrees and aim for 1.5 degrees by the end of the century. Although it is just a mere 0.5 degrees, reports have highlighted stark comparisons on the major impacts that half a degree of warming can result in, such as frequent natural disasters, rapid loss of biodiversity etc that will endanger livelihood ultimately.
While efforts have been undertaken by countries to set targets, an analysis of the 2030 targets expressed by countries at the COP26 conference shows that none of the countries are doing enough to limit the temperature rise, and that by the end of this century, the temperature rise is expected to reach 2.4 degrees Celsius, far exceeding the original target of 1.5 degrees Celsius. Efforts to reduce carbon emissions are evidently inadequate, especially in smaller and developing countries that faces land, resources constraints or do not have the means to contribute to the trillions of dollars of investment in renewable energy. The conference ended with a consensus by countries to revisit and strengthen their 2030 targets by next year, as well as for wealthier countries to provide financial support to developing countries. Following the COP26 event, the media expressed their views on the role of businesses in realising a carbon free future. Clearly, the event presents itself as a signal for companies looking to do new business developments to focus on sustainability fields such as clean energy, disasters proofing, food security etc.
While countries strive to do their part to strengthen domestic policies, companies should also take the initiative to set their own carbon emission reduction targets above national goals. In addition, companies can look towards capitalizing on investment opportunities, especially towards developing countries.
During this time event, despite Singapore climate policies being rated as critically insufficient by the Climate Action Tracker (CAT)[2], the developing country demonstrated its resolve to achieving a carbon free future by being the first in Asia to sign on the Powering Past Coal Alliance[3] followed by several partnership coalitions, reiterating that it will be stepping up on its efforts to review its climate targets, emphasizing the need for a collective action from the whole of Singapore under the strategy of mitigation and adaptation. Naturally, this signifies more ambitious targets which will lead more green initiatives, businesses and innovations in the field of sustainability.
Furthermore, Singapore had the honour of being appointed as the co-facilitator to provide solutions to help countries come to a consensus on the terms for the implementation of Article 6[4], which is an outstanding brought forward since the COP24. The successful implementation of Article 6 reaffirmed Singapore’s reputation as a transparent and fair country capable of being an intermediary between countries by understanding their needs and providing maximum support. This will be of significance to Singapore’s plans to work towards a global business as well as carbon trading hub, which fundamentally requires quality and trust from the other countries. As such, Singapore has the responsibility of ensuring its sustainability targets are promptly met in order to build up on its credibility and maintain its high reputation in the international arena, and this cannot be done without the influx and contributions of innovative start-ups and companies in the sustainable field.
Japan, on the other hand, has decided to take a conservative approach this time around, withholding agreement on the complete phase-out of coal, despite country’s significant progress on the Nationally Determined Contributions (NDC) reduction target for domestic emissions (from 26% to 46%) at the 2021 Leaders Climate Summit back in April. In spite of its decision on the issue of coal, the developed country contributed to the launch of a framework and provision of funds to promote zero emission innovative initiatives throughout Asia, demonstrating its ambitions to lead asia into a zero-carbon society. In addition to innovations revolving renewable energies, Japan is also looking to discover innovations from Asia to neutralize environment impacts created by coal.
This particular move of Japan’s signals the promising future of green innovations emerging in the asia market. As Japan directs its foresights to innovations in asia, we will also be expecting more Japanese companies to expand overseas and collaborate with innovative start-ups in the sustainable field. In fact, some Japanese companies have already started the ball rolling prior to the COP26 conference. One such example is Toyo Seikan Group, who set up an overseas innovation base in Southeast Asia Singapore in the hopes to explore for new business opportunities and contribute their existing know-hows in the sustainable sector. Recognising issues such as the global decline of the agriculture and fisheries industries, water shortages, the spread of new infectious diseases, and the growing population in developing countries, the company identified food as one of the representative of the threats to sustainability posed by the further escalation of global warming and chanced upon the opportunity to collaborate and invest in Shiok Meats, the first cell based meat company in Asia that produces cell-based seafood to resolve the world’s increasing risk of food crisis.
During the COP26 conference, ministers has also reiterated the importance of the need for sustainable food systems to ensure global food security and achieve climate objectives. Incidentally, CES 2022[5], which will be held in Las Vegas at the beginning of next year, has also included food tech as one of its exhibition features for the first time. The increasingly importance of food sustainability signifies that in the upcoming years, Shiok Meats may potentially play a key role in ensuring a sustainable future, and when that times comes, Toyo Seikan Group will play an important role in the introduction of sustainable foods to the Japanese market as well. As seen from the example of Toyo Seikan Group, Japanese companies will be placed in a unique position, playing the role of a bridge between Japan’s local and overseas market, contributing to Japan’s goal of leading asia to a sustainable future.
All in all, it can be seen that the COP26 played a great significance in shaping the future direction of the business ecosystems of Singapore and Japan. Singapore has decided to take on a bold approach in contrast to the conservative approach that Japan had decided on, shaping their future business ecosystem in different directions, with Japan focused on encouraging innovations to taking place overseas, particularly in asia and Singapore welcoming the influx of innovations start-ups and activities in the sustainable fields to take place in its country. In spite of their different approaches, businesses in both countries can complement each other in terms of the development of innovation solutions towards a sustainable future.
[1] Toyo Seikan Group is a Japanese Packaging container company which launched the Open Up Project in 2019 to contribute to a sustainable future through technological development in partnership and investments with companies or start-ups. Its overseas innovation base, the Future Design Lab, was set up in Singapore in year 2019.
[2] Climate Action Tracker is a research group that aims to monitor government actions to achieve greenhouse gas emission reductions in accordance with international agreements. The results of its analysis are used in international climate change events such as the COP (United Nations Framework Convention on Climate Change).
[3] The Powering Past Coal Alliance (PPCA) is a coalition of national and subnational governments, businesses and organisations working to advance the transition from unabated coal power generation to clean energy.
[4] Article 6 of the Paris Agreement aims at promoting integrated, holistic and balanced approaches that will assist governments in implementing their NDCs through voluntary international cooperation.
[5] CES (Consumer Electronics Show) is the world’s largest consumer electronics event that sets the scene every January for what the upcoming trends are for the global electronics industry.
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