Corporate sustainability faces a turbulent period due to global instability inducing a significant reorganization

In the rapidly evolving landscape of sustainable finance, AIA Group's commitment to environmental responsibility stands firm. Dr Mark Konyn, AIA's Group Chief Investment Officer, recently addressed this topic at the "Unlocking capital for sustainability" event in Hong Kong.

Konyn highlighted that despite some major multinational firms rolling back their sustainability commitments, AIA's business partners in the US remain steadfast in their dedication to sustainability. This commitment is a testament to AIA's unwavering focus on environmental stewardship.

Hong Kong, too, has been making significant strides in sustainable finance. The city has issued a total of US$84 billion in green and sustainable debt, positioning itself as a "trusted hub" for climate finance. Hong Kong aims to bridge capital with transformative carbon projects, further solidifying its role as a regional hub for sustainable investment.

China, a key player in driving sustainable finance and renewable energy investments, has made impressive strides. Solar and wind installations in China overtook fossil fuels for the first time in 2024, and China has cut the carbon intensity of its power sector by 8% in a year due to massive renewable energy additions. China manages over 60% of its total carbon emissions through a regulatory system for carbon trading, and has completed the first batch of voluntary emission reduction registrations.

However, the global push towards sustainability faces challenges. The geopolitical volatility and macroeconomic uncertainty have caused a "shakeout" for corporate sustainability commitments. Notable withdrawals from the United Nations-supported Net Zero Banking Alliance (NZBA) include UBS, JPMorgan, Citigroup, HSBC Holdings, Barclays, and some Asian banks, such as Sumitomo Mitsui Financial Group.

Indonesia and Argentina have signaled a potential retreat from the Paris Agreement on climate change, adding to the global pressure on China to fill the void left by the US as the world prepares for the next round of climate talks at COP30 in Brazil later this year.

Amidst this uncertainty, Konyn observed a phenomenon called "greenhushing", where companies keep quiet about their sustainability efforts. AIA, however, has been transparent about its commitment to sustainability. Since 2022, the company has produced 220 ESG funds with assets totaling HKD$1.2 trillion (US$1.5 billion). AIA has also sold off its US$10 billion portfolio of coal investments in 2021 and had its near-term emissions targets validated by the Science Based Targets Initiative (SBTi).

Moreover, AIA has a 2050 net zero goal, aligning itself with global efforts to combat climate change. Shouqing Zhu, China policy advisor at the United Nations Environment Programme Finance Initiative, echoed this call, urging the world to "double down" on climate action.

In conclusion, while the global push towards sustainability faces challenges, AIA's commitment to environmental stewardship and Hong Kong's role as a regional hub for sustainable investment provide a beacon of hope in a rapidly changing world.

Corporate sustainability faces a turbulent period due to global instability inducing a significant reorganization