Back
Material
topics
Responding to climate change Harnessing the power of technologyReinforcing cyber resilience and data protection Building an agile, inclusive and sustainable workforce
CLP Sustainability Report 2020 / Material topics / Responding to climate change

Responding to
climate change

Responding to climate change

Year in review

The COVID-19 pandemic has presented many new challenges this year, but it has not altered CLP’s commitment to climate action. The pace of change has expedited around the world, underscoring the importance for CLP to accelerate its transition to a low-carbon economy.

Recent years have seen high-impact climate events including typhoons, floods, droughts, heatwaves and bushfires around the world, often in the markets where CLP has a presence. The bushfires in Australia over the summer of 2019/2020 burned over 24 million hectares, with the largest losses in the eastern states. In Mainland China, the worst flood in over two decades occurred in the 12 provinces of central and southern China during the year’s rainy season.

There is ample evidence that the impacts from climate-related events are costly. The insurance damage from the top 10 climate disasters is estimated to have amounted to over US$150 billion in 2020.

In response to the economic damage caused by the COVID-19 pandemic, the concept of ‘build back better’ has emerged, where government economic stimulus efforts are being directed towards climate action. Governments and businesses have prioritised spending to accelerate the delivery of clean power, enable clean mobility and ensure that recovery policies align with net-zero greenhouse gas (GHG) emissions to achieve a green recovery. For CLP, decarbonisation remains a strategic priority and it aligns with the Company’s commitment to SDG 7 – Affordable and clean energy and SDG 13 – Climate Action.

The year 2020 is a milestone under CLP’s Climate Vision 2050. The Company is pleased that its carbon intensity has reduced to 0.57kgCO2/kWh, surpassing the 2020 decarbonisation target of 0.6kgCO2/kWh.

Due to portfolio changes and evolving market circumstances the clean energy targets for 2020 were not met. A review of CLP’s decarbonisation targets to 2050 is now underway, in line with the Company’s commitment to strengthen them at least every five years.

This year, the Group has further enhanced its disclosure. It has followed the Task Force on Climate-related Financial Disclosure (TCFD) recommendations to provide transparent and credible climate-related information to stakeholders, including investors and capital providers. CLP business units have also strengthened analyses on the risk and opportunities from climate change specific to their markets.

The Group's progress on its key climate change metrics, as at 31 December 2020, is outlined below.

Key metrics - Responding to climate change

Outlook

Both governments and capital providers are prioritising low-carbon investment as a means of economic stimulus. As a lead-up to COP26, a continued acceleration of country pledges towards carbon neutrality by 2050 is expected.

At the international level, there were keen expectations of the 26th United Nations Climate Change Conference of the Parties (COP26), originally scheduled to take place in November 2020 in Glasgow, UK. Under the Paris Agreement, 2020 was to be the year when countries stepped up their ambition and enhanced their Nationally Determined Contributions (NDCs) to slow or reverse growth in GHG emissions. COP26 was postponed to November 2021 due to the COVID-19 pandemic.

Despite the COP26 deferment, during 2020, nations continued with their pledges towards carbon neutrality. The EU in March and the UK in June announced their ambitions to become carbon neutral by 2050. China followed suit in September with a pledge to become carbon neutral by 2060. Both Japan and South Korea made announcements in October for carbon neutrality by 2050. The same commitment for carbon neutrality was announced by Hong Kong in November. Immediately after taking office, US President Joe Biden signed an Executive Order for the US to rejoin the Paris Agreement. A US national commission is expected to be appointed to accelerate domestic action and international leadership on climate change.

As countries step up their respective commitments, companies are also expected to raise their ambition and accelerate decarbonisation efforts. Investors, especially those focusing on the long term, recognise the value of climate change risk management, and increasingly take these into consideration when reviewing their portfolios.

This convergence of external investor pressure, government support for carbon neutrality and TCFD disclosure is clearly being felt by companies in carbon-intensive sectors. While roadmaps on how to achieve carbon neutrality are yet to be determined, further details are expected to emerge ahead of and during COP26. CLP will continue to monitor the policy landscape and development of different performance standards, and feed this information into its 2021 review and strengthening of CLP's Climate Vision 2050 targets.

Climate Vision 2050

Climate Vision 2050

The publication chronicles how CLP's Climate Vision 2050 has evolved over the years. It is integrated into CLP’s strategies on asset portfolio management, guiding the Group in managing climate-related opportunities and risks.

Read more

Response to TCFD

As part of CLP's participation in the WBCSD TCFD Preparer Forum for Electric Utilities, the Company has undergone a comprehensive review of how the recommendations are met and has adjusted its disclosure accordingly.

Read more
TCFD

Highlights

CLP's climate disclosure follows the TCFD recommendations. The Company's disclosure outlines progress against the CLP Climate Vision 2050, climate-related risks and opportunities, and investments facilitating the transition to a low- carbon economy.


Back to top