Q&A with Sandra Seah on ESG

Q: It’s March 2023. What are your thoughts on the current energy environment? Are we still floundering in an ‘energy crisis’?

According to IEA, renewables were the only energy source for which demand increased in 2020 despite the pandemic, while consumption of all other fuels declined. However, energy markets began to come under strain in 2021 because of confluence of several factors - the unforeseeable rapid economic rebound following the pandemic and the international spillover from US headline inflation.

But the situation escalated dramatically into a full-blown global energy crisis following Russia’s invasion of Ukraine in February 2022. The price of natural gas reached record highs, and as a result so did electricity in some markets. Oil prices hit their highest level since 2008 (U.S. oil spiked to USD130.50 in March 2022 before retreating). The electricity markets in EU experienced skyrocketing prices due to uncertainties over both fossil fuel supplies and the economic outlook.

Currently, high energy prices are exacerbating the high inflation, slowing economic growth to the point that some countries are heading towards severe recession. An insightful report from World Bank shows that lack of access to finance under reasonable terms, makes the costly upfront investments in renewable energy unaffordable for developing nations. While gas-fired generation in the EU is forecast to decline, growth in the Middle East may offset this decrease. A fall in coal-fired generation in Europe and the Americas may well be matched by a rise in Asia Pacific. There may be a retreat back to fossil-fired generation amidst the manifold challenges of the sluggish global economy, adverse weather events, high fuel prices and uncertain government policies.

We need solid policy reforms, clever capacity development, sound financing arrangements and global coordination ensure clean, affordable and accessible energy for all, but this is plainly not yet the case based in recent G20 in New Delhi.

Today there is truly an energy crisis which involves a potential U-turn back to fossil fuels, stubbornly high energy prices, and a perceived lack of global consensus or leadership in mitigating the rise in emissions.

Q: For years the developed countries who are in minority have been telling the world (and majority developing countries) to reduce their energy intake in order to reduce emissions. Yet per capita, most of the low emission countries are amongst the poorest in the world and countries like Australia, US and Canada are amongst the worst ‘offenders’. How can we solve the need to reduce emissions in developed vs developing countries without putting further pressure on those in need?

Power systems - Electricity generation will need to reach net zero emissions globally as soon as possible. The electricity system needs flexibility and plug & play capability, such as batteries, demand response, hydrogen-based fuels, hydropower and more – to ensure reliable supplies.

Clean power – Heavy industries and transportation need to be low or zero emissions. This means car run on electricity or fuel cells, plane run on advanced biofuels and synthetic fuels, and industrial plants run on carbon capture or hydrogen.

Coordinated efforts – Every strata has to collaborate. Governments, working closely with businesses, investors and citizens. Also international cooperation amongst countries.

Q: In terms of ‘Just Transition, what do you think is the role of the S in ESG?

In order to tackle pressing environmental challenges like climate change, pollution and plummeting biodiversity, nations and businesses need to transition towards greener, resilient and climate-neutral economies and societies.

A Just Transition means greening the economy in a way that is as fair and inclusive as possible to everyone concerned, creating decent work opportunities and leaving no one behind.

There has to be 2 Cs - Conversation and Consultation - on the social objectives to be achieved.

At the same time, it is incumbent on corporations to be conscious that they can aspire to be a generator of decent green jobs that can contribute significantly to poverty eradication and social inclusion; or

can take a holistic approach to sustainability reporting and impact management, harnessing useful tools such as the collaborative approach by B Lab and GRI

Q: What would you recommend to every reader of this article in order for the world to align with the Paris agreement?

• Conscionable living: In his 93 years, David Attenborough has visited every continent on the globe, exploring the wild places of the planet and documenting the living world in all its variety and wonder. But during his lifetime, Attenborough has also seen first-hand the monumental scale of humanity's impact on nature. Watch on Netflix : A Life on Our Planet.
• Embrace and invest in energy efficiency: At a personal level and corporate level.
• Procure energy from sustainable sources: Make the effort to transition to green and to only use clean.