Published on 12 Mar 2024

Sustainability Leadership: Navigating the Challenges and Opportunities

In this fireside chat, NBS Alumnus and UOB’s Chief Sustainability Officer, Mr. Eric Lim delved into the intricate relationship between sustainability, technology, and finance.

Mr Lim emphasised the urgent need for a unified approach to combat climate change and achieve net-zero emissions. He spoke passionately about the importance of moving beyond mere commitments to implementing actionable, technology-driven solutions. He called for a balanced approach that considers socio-economic factors, advocating for a "just transition" that ensures economic stability while pursuing environmental goals.

Moderating the session was Prof S. Viswanathan (Vish), Professor of Operations and Corporate Sustainability at Nanyang Business School. He is also the Director of NTU’s Centre for Business Sustainability, and a Cluster Director of the Energy Research Institute @ NTU (ERI@N).

The following is an edited transcript:

Progress at UN Climate Change Conference (COP 28)
Mr Lim discussed the substantial strides taken in global decarbonisation efforts during COP 28. He shed light on the complexities and significance of the debates held at the conference, especially given its location in oil-producing nations. These discussions, Mr Lim argued, testified to the COP's vital role and effectiveness in spearheading worldwide initiatives towards decarbonisation. This platform's ability to bring contentious issues to the forefront is crucial for making tangible progress in the fight against climate change.

Challenges of Achieving Net-Zero
The journey towards achieving net-zero emissions presents various challenges. Mr Lim discussed the complexities of decarbonisation, such as political and socio-economic issues, as well as competition among nations. While he expressed concerns about the feasibility of meeting the ambitious 2030 reduction commitments due to a lack of coordination and the still-developing state of essential technologies and regulatory frameworks, he remains optimistic about the 2050 targets. He is hopeful for the future, anticipating the development of new, commercially viable technologies that will contribute to a more sustainable future.

Challenges and Opportunities in Sustainability Reporting and Regulation
Sustainability reporting and regulation are evolving, presenting both challenges and opportunities for businesses. Mr Lim touched on the dynamic nature of sustainability standards and regulations, underlining the need for businesses to remain agile and informed in the face of increasing demand for transparency and accountability in sustainability practices.

Importance of Sectoral and Ecosystem Approaches
Sustainability should be tackled not just within individual companies but across entire sectors and ecosystems of the value chain. This calls for a broader perspective on sustainability efforts, emphasising the importance of sectoral and ecosystem-level approaches. Mr Lim reasoned that an ecosystem solution that empowers small and medium enterprises (SMEs) and other value chains is crucial to global decarbonisation efforts because SMEs play significant roles within the larger value chains to achieve more widespread impact.

Insights on Blended Financing and Carbon Credits
Blended financing, which combines public and private funds to support sustainable development projects, can unlock significant investment in green infrastructure, renewable energy, and other critical areas. Carbon credits, on the other hand, offer a mechanism for companies to offset their emissions by investing in environmental projects. Mr Lim suggested that the strategic use of blended financing and carbon credits plays a role in accelerating the transition to a low-carbon economy. This also demonstrates the financial sector's role in facilitating environmental and social progress.

Role of Financial Institutions
Financial institutions are pivotal in promoting sustainability. Mr Lim shared that UOB is striving for operational carbon neutrality and tackling the challenges of financed emissions by focusing on the regional decarbonisation pathways. These pathways not only account for the environmental objectives, but also consider socio-economic outcomes. The bank’s innovative approach highlights the interconnectedness of sustainability goals and societal well-being, and sets an example for how financial entities can contribute to global sustainability efforts.

Sustainability Leadership and Corporate Governance
Leadership is a cornerstone in the fight against climate change. Mr Lim spoke about how the journey to becoming UOB’s Chief Sustainability Officer involved a steep learning curve. There is a need for leaders who can navigate the complexities of sustainability and develop innovative business models and policies that support technological advancements to achieve sustainability goals. He also emphasised the importance of corporate governance in aligning sustainability initiatives with overarching business strategies. This top-down support ensures that sustainability is not an isolated function but a strategic priority that influences decision-making across all levels of the organisation.

Future of Sustainability Roles
Mr Lim pointed out that role of Chief Sustainability Officers (CSOs) is evolving towards a future where sustainability expertise becomes a strategic imperative for leadership roles. Sustainability will become integral to all business roles, and it is important to embed sustainability into the core business strategy and operations. This shift signifies a transformation in business paradigms. The dynamic nature of sustainability will require continuous learning and adaptation to keep pace with evolving challenges and solutions.

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Watch the fireside chat here: