This article first appeared in The Edge Financial Daily on May 17, 2019

KUALA LUMPUR: Businesses globally should be encouraged to know that there is an increasing evidence linking energy transition and economic growth, said UK special representative for climate change Nick Bridge.

Citing statistics, Bridge said since 1990, the UK has reduced carbon emissions by over 40% while growing the local economy by over 70%.

He said the low-carbon economy could grow four times faster than the projected growth of the economy as a whole between now and 2030. It could also deliver between £60 billion and £170 billion of export sales of goods and services by 2030.

Speaking to The Edge Financial Daily after the launch of the Malaysian Chapter of the Climate Governance Initiative, Bridge said Malaysia, among other countries, will have to increasingly think about how to operate in an environment affected by climate change.

“Every business will have to sit down and look at its assets, some of which are a physical risk. If you are near the coast, for example, you might experience extreme storms. So will your business still be a business in a climate-affected world? There is a need to rethink the strategy,” he said.

Energy, Science, Technology, Environment and Climate Change Minister Yeo Bee Yin officiated the launch.

Bridge said in terms of investment, the trend moving forward will lean more towards green investing which will force many in the financial sector to rethink where it puts its money.

“There are clear risks in investing in the fossil fuel sector today because the science is very clear and governments are also decarbonising. So if you invest now for the long term in fossil fuel, you will have to think very carefully about whether that’s a good proposition. As it is, you see investors, trading houses and banks question the value of such investments. In a way people will have to think whether they are getting left behind,” he said.

Bridge said there are empirical studies based on listed entities of the London Stock Exchange showing a link between companies that take environmental, social and governance factors most seriously with the highest performers and highest returns.

“Investors will want to invest in companies that are creating long-term value,” he said.

Bridge added that there are currently a number of initiatives in the UK marketplace helping encourage transparency in reporting among companies.

“There are initiatives like carbon disclosure projects, carbon tracker initiatives that are helping create the kind of transparency so you can see which companies are moving and which are not. This is what the UK businesses say they want as they want to ensure long-term certainty in the market. It’s important for businesses, governments and consumers to work together to improve the situation,” he said.