Tackling Asia’s Agricultural Emissions: Improving the Supply Chain

Alexandra Tracy, Green Finance Advisor of Friends of the Earth (HK)

After the industrial sector, agriculture and deforestation are among the largest sources of greenhouse gas emissions in Asia, accounting for more than 20 percent of the total.  Much of this occurs at the farm level, especially where there is livestock, which generates significant methane emissions.  But at the same time, off farm activities are contributing a growing share of food system emissions across the entire production, transportation and consumption chain.

As inefficiencies in the supply chain are becoming better understood, agribusiness and food companies are responding to increasing pressure from governments, investors and consumers to improve bottlenecks and reduce wastage.  New technologies can address some of the challenges, and can be utilised to create affordable solutions for rural communities.

Reducing food loss and waste

Every year, approximately 690 million tonnes of food is lost and wasted in Asia.  The loss of foodstocks means that extra production is required to compensate, bring more land into cultivation and using up scarce water and natural resources.

Technology can be used to reduce wastage at source – enabling farmers and manufacturers only to produce according to actual demand.  The Japan Weather Association, for example, has collaborated with food producers such as Sagamiya Foods, which makes tofu, and sauce company, Mizkan Holdings, to develop an artificial intelligence (AI) system to forecast food demand based on weather information and sales data.  The system allows companies scale back redundant production and cut food inventory losses. 

However, the majority of losses occur in emerging markets immediately after harvest, where poor storage facilities and inadequate transport infrastructure mean that large amounts of food are wasted.  In India, for example, only about 10 percent of perishable food is kept in cold storage systems, leading to spoiling of up to 30 percent of fruits and vegetables.  To tackle this problem, the government launched the India Cooling Action Plan to provide better access to sustainable cooling technology for local farmers.  In neighbouring Bangladesh, a private company Solar E Technology provides affordable, solar based micro cold storages.

In more developed markets, automated freezer storage, using robots to stack and retrieve food products efficiently, can reduce food wasted through human error or delays.  For example, in Malaysia, a local company, SK Cold Chain, offers fully automated cold storage facilities and warehouse management systems.

Food waste in cities

In cities, growing volumes of food waste, as well as packaging materials at the retail and consumer levels have to be disposed of by incineration or in landfill, both creating emissions.

Some governments in Asia are using financial measures to reduce food waste.  For example, in several areas of Korea, authorities have introduced a policy requiring households to pay for recycling services according to the quantity of food waste disposed, which has reduced total volume by over 10 percent.  Parts of China have similar schemes for both households and restaurants.

Better inventory management

Restaurants can also use inventory management systems to track and reduce food waste.  A British start up, Winnow Solutions, with offices in Singapore and Shanghai, uses smart meters to track everything thrown away in a restaurant kitchen and allows staff to alter menus and portion sizes accordingly.  Users have been able to achieve a reduction in food waste of up to 50 percent.  Another start up in Singapore, Lumitics, uses AI to help hotels and airlines to understand how much food waste they are generating and adjust their planning decisions about what produce to buy and serve.  As well as reducing overall emissions, these initiatives allow businesses to monitor and better manage their costs.

Packaging can be part of the solution

Food packaging in a typical Asian supermarket, where the onus is on hygiene and appearance, contributes materially to the overall emissions in the supply chain.  There has been recent pressure to move away from single use plastics and some countries, including China, are considering allowing recycled plastic materials.

But innovative packaging can also increase the shelf life of fresh food and reduce wastage.  In Singapore, for example, the government’s Agency for Science, Technology and Research, together with a local company, Dou Yee Enterprises, have developed a new material for food packaging that can extend the shelf life of food by at least 50 percent.

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Upcoming Events on Green Finance (Jan – Feb 2022)/ 2022年1-2月綠色金融活動一覽

Check out the above calendar for the fantastic green finance events for January and February 2022! Interested to join and learn more about green finance? Browse the links below to check out the upcoming events on Green Finance.


[1] Asia Pacific ESG Talent Incubation Roundtable 2022 & CESGA® Programme Insights Sharing

[2] APAC Climate Change Progress & Obstacles in 2022

[3] How ESG Is Impacting Portfolio Construction and Investment Outcomes

[4] Human rights in sovereign debt analysis

[5] ISS ESG: Responsible Investment Forecast for 2022

[6] CFA Institute Alpha Summit APAC

[7] Sustainability Week Asia

[8] IGCC Climate Investment and Finance Summit

Visit www.foe.org.hk for more news about Friends of the Earth (HK)!
Green Finance Facebook page: https://www.facebook.com/greenfinancefoehk/
FoE (HK) LinkedIn page: https://www.linkedin.com/company/friends-of-the-earth-hk/

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Turning the Spotlight on Nature and Biodiversity in 2022

Green Finance Advisor of Friends of the Earth (HK)

While climate change stays in the focus of the society and investors, we are glad to see more discussion around the topic of nature and biodiversity. In fact climate and nature are impacting each other. Climate change has driven the increase in wildfire, drought and other hazards happening in nature. On the other hand, the weaker ecosystems of our sky, land and ocean have impacted the ability of the nature to regulating climate. Having a stronger nature can certainly help us mitigate climate change. We need big and quick actions from both the corporations and the governments to help recover our ecosystems.

Noticeably, climate action failure, biodiversity loss and natural resource crises are among the long-term existential threats for the world according to The Top Global Risks Reports 2021[1] from the World Economic Forum. (And we believe that these three risks are very likely to stay as the world’s major threats in The Global Risks Report 2022, which is scheduled to be published in this month.) According to the report from The World Bank, the collapse of the ecosystem would cost US$2.7 trillion annually (or 2.3% of global GDP) and some countries would be hard hit. In 2021, a group of 34 executives from global financial institutions, corporates and market service providers were appointed to the Taskforce on Nature-related Financial Disclosure (TNFD). The Taskforce members will help develop a framework for corporations to assess their nature-related risks and opportunities.

TNFD will adopt the same structural approach of TCFD’s four pillars (governance, strategy, risk management and metrics & targets) to guide companies operate and report nature-related issues. That being said, companies face more challenges when assessing their financial impact related to nature than those related to climate. This is underpinned by the complexity and the scope of nature-related issues. We have developed a widely accepted set of metrics for measuring climate risks (such as greenhouse gas emissions from Scope 1 to 3 and carbon prices). But there is no single set of one-size-fit-all metrics for assessing nature-related topics. Each nature-related topic (e.g. land degradation, biodiversity and water pollution) will need to be assessed by its own set of metrics.

It is important for corporations and nations to understand and access their nature risks and the associated financial impacts. While TNFD will take some time to be launched for wider adoption (by 2023), corporations and nations do not need to wait. There are plenty of tools available to help them assess nature related impact. The web-based ENCORE, developed by Natural Capital Finance Alliance in partnership with UNEP-WCMC, is a useful tool to facilitate financial institutions assess dependencies and impacts on natural resources for major industries. The Global Forest Watch is another online platform that provides tools and near real-time data for monitoring forests. We see no lack of tools for measuring nature-related impact but there a lack of effort among companies and governments to drive substantial positive impact on our nature.

Same as climate change, nature depletion and biodiversity loss are systemic risks that affect everyone of us. In 2022, the second part of the United Nations Biodiversity Conference (COP15) is expected to be held and to conclude the Post-2020 Global Biodiversity Framework. The Framework aims to work on 21 targets and 10 milestones for 2030.[2] The goal is to put the earth on the path to recover its nature and biodiversity. We urge businesses and governments to take bold moves to manage and reduce their nature risks and to drive positive changes to our ecosystems.

[1] The Global Risks Report 2021, the World Economic Forum, January 2021

[2] First detailed draft of the Post-2020 Global Biodiversity Framework, Convention of Biological Diversity, June 2021

Outlook 2022: What is next for ESG?

Friends of the Earth (HK) Green Finance Team

As the unprecedented year of 2021 draws to a close, the impact of COVID-19 continues to wreak havoc across the globe, during which climate change and social inequality are viewed by many as some of the biggest worries according to the latest survey conducted by Ipsos across 28 countries.1

Global warming has been identified as a key contributor to extreme weather events, which have caused an estimated USD170 billion of economic damages this year.2

In the wake of all the devastating weather events this year, many countries are determined to reduce their carbon footprint, and pledges are made to achieve net zero target by mid-century. Whilst climate change continues to be one of the focal points, social and governance matters have also been the subject of discussions by business and investor communities.

Looking ahead in 2022, it is likely COVID-19 will continue to be the top priority for the global communities, where coordinated efforts will be made in attempts to irradiate the diseases, but increased focus will also be placed to address some of the other concerns including social inequality and carbon neutrality.

Governments will likely establish rules and regulations in order to track carbon emissions and to develop green economies. ESG education and engagement will be considered as the critical components to drive the development of green finance with the intention to address the relevant concerns.

In order to keep up with the latest compliance requirements globally, demands for ESG talent has risen substantially and a noticeable shortage of ESG trained professionals can be observed on the market place.3  In order to bridge the gap, The European Federation of Financial Analysts Societies (EFFAS) has partnered with Friends of the Earth (HK) to promote the industry recognized ESG professional credential, the Certified Environmental, Social and Governance Analyst (CESGA®) programme aimed at addressing such shortcoming. The number of CESGA® graduates from Hong Kong currently ranked amongst top 5 in 53 regions worldwide and ranked first in the Asia Pacific region.

Friends of the Earth (HK) will continue to promote ESG professional education in 2022 with the objective to incubate more professional talents and help mobilize the industry to take action in creating a greener and sustainable future.

To learn more, please register and join our Asia Pacific ESG Talent Incubation Roundtable 2022!

1 https://www.weforum.org/agenda/2021/11/what-worries-the-world-ipsos-survey/
2 https://www.christianaid.org.uk/sites/default/files/2021-12/Counting%20the%20cost%202021%20-%20A%20year%20of%20climate%20breakdown.pdf
3 https://home.kpmg/cn/en/home/insights/2020/08/nurturing-esg-talent-in-hong-kong.html