Thu, December 02, 2021

perspective

KPMG identifies Thailand as ‘country to watch’ in achieving net zero while Norway tops the list for most prepared nation


The Thai government has pledged to support the private sectors transition to a low carbon economy and make sure that the shift is smooth and has minimal impact, with an emphasis on the Bio-Circular-Green Economy (BCG) Model to help tackle climate change.

KPMG has conducted the first-ever Net Zero Readiness Index (NZRI) to assess countries’ readiness to transition to Net Zero. Oil-rich Nordic nation deemed ‘most prepared’ and ‘ready’ to reach Net Zero by 2050.

• Northern Europe dominates top spots, with Norway ranked number one, and UK and Sweden in second and third place.

• A lack of delivery capability is a weak point in global Net Zero emissions ambitions.

• Thailand deemed as ‘country to watch’ in achieving Net Zero, being one of seven countries seeing significant opportunities to advance their decarbonization efforts through large-scale projects and emerging escalation initiatives

The report compares the progress of a selection of countries in reducing the greenhouse gas emissions that cause climate change and assesses their preparedness and ability to achieve Net Zero by 2050. The date 2050 was proposed by the United Nation’s (UN) Intergovernmental Panel on Climate Change, which said that cutting net emissions by about 45 percent from 2010 to 2030, then 100 percent by 2050 would limit temperature rises to 1.5 degrees Celsius. In August 2021, a total of 195 governments said that humanity has already warmed the planet by approximately 1.1 degrees Celsius; that 1.5 degrees is likely to be reached or exceeded in the next two decades; and that without immediate, rapid and large-scale reductions in emissions, limiting warming to 1.5 or even 2 degrees will be beyond reach.

Using 103 indicators, recognized as key drivers to achieving Net Zero, the top 25 performing countries and seven ‘countries to watch’ were identified.

Despite being one of the world’s largest oil and gas exporters, Norway topped this year’s NZRI, partly due to private and public investment in renewable energy and electrified transport across the country. In 2016, the Norwegian parliament voted to bring forward its target date for carbon neutrality from 2050 to 2030. However, despite their top ranking, the nation still faces significant decisions over how it continues to tackle challenges in their transition to net zero.

The UK, which is hosting the COP26 Climate Summit this month, took overall second place, due in-part to cross-party political support and clear legally-backed targets that have enabled the comparatively swift decarbonization of the country’s power generation sector, but many obstacles remain – particularly on heat and buildings.

Key findings from the Index include:

• Some countries are lagging in adopting Net Zero with only 9 of those surveyed, who account for approximately 8 percent of global emissions, having legally binding commitments in place. In order to stimulate delivery capability at the sector level, these targets need to be backed by robust strategies, policies and support mechanisms. In most jurisdictions the NZRI preparedness on a national level is mirrored by the level of readiness at the sector level.

• A lack of delivery capability is a weak point in global Net Zero ambitions. The Index shows that those countries with a Net Zero target in place, either legally binding or policy, demonstrate stronger capability across sectors. The report also shows a correlation between prosperity and the readiness to achieve Net Zero, highlighting the need to escalate the mobilization of support to developing economies.

• Insights from all surveyed nations show that whilst the global financial sector is increasingly factoring climate risk into their investment and lending decisions, governments have a critical role to play in enhancing access to such financing by creating enabling environments such as sustainable finance strategies, policies and regulatory frameworks.

• These country insights also help to highlight the importance of political alignment and public support in the success of key decarbonization initiatives.

The NZRI top 25 countries are:

Rank

Country

 

 

Rank

Country

1

Norway

 

 

14

USA

2

United Kingdom

 

 

15

Singapore

3

Sweden

 

 

16

Chile

4

Denmark

 

 

17

Australia

5

Germany

 

 

18

Brazil

6

France

 

 

19

Poland

7

Japan

 

 

20

China

8

Canada

 

 

21

Malaysia

9

New Zealand

 

 

22

Argentina

10

Italy

 

 

23

Mexico

11

South Korea

 

 

24

Turkey

12

Spain

 

 

25

UAE

13

Hungary

 

 

 

 

 

KPMG also listed seven countries to watch as these countries are seeing significant opportunities to advance their decarbonization efforts through large-scale projects and emerging escalation initiatives:

• India

• Indonesia

• Nigeria

• Russia

• Saudi Arabia

• South Africa

• Thailand

Thailand has plans to achieve carbon neutrality by 2050 and net zero emission by 2065 under a new energy plan that could see renewable energy account for a 50% share of its new power generation We have seen this translated into several initiatives such as only zero-emission vehicles being allowed to register as new vehicles from 2035 onwards. The Thai government has pledged to support the private sector's transition to a low carbon economy and make sure that the shift is smooth and has minimal impact, with an emphasis on the Bio-Circular-Green Economy (BCG) Model to help tackle climate change.

Tanate Kasemsarn, Head of ESG, KPMG in Thailand

“The last few years have seen increasing public awareness of climate change in Thailand, partly due to the government adding the subject to the education curriculum,” says Tanate Kasemsarn, Head of ESG, KPMG in Thailand. “This is progress in the right direction as we are creating a generation that is aware of the importance of climate change. At KPMG, we believe in working together towards a more sustainable future and we can only achieve that with not only the commitment of the public sector, but also of the private sector.

Ganesan Kolandevelu, Head of Climate Change and Sustainability Services, KPMG in Thailand

“Thailand will need to improve research capacity, especially in harder-to-decarbonize sectors,” says Ganesan Kolandevelu, Head of Climate Change and Sustainability Services, KPMG in Thailand “Technologies such as those that can measure the emission of greenhouse gas, will help the country achieve its climate change agenda. This will need cooperation from all stakeholders. For businesses, having a clear ESG agenda should not just be a ‘tick-the-box’ activity. There are real added benefits from being a sustainable business, and this includes increasing confidence of stakeholders and loyalty from consumers.”

Natthaphong Tantichattanon, Partner, Climate Change and Sustainability Services, KPMG in Thailand.

“Another point for companies in Thailand to consider is the Securities and Exchange Commission (SEC)’s requirement for the ‘One Report’ for reporting year 2021 that gives more focus on the disclosure of sustainability and ESG,” says Natthaphong Tantichattanon, Partner, Climate Change and Sustainability Services, KPMG in Thailand. With increased requirements for sustainability disclosure, companies must now disclose their sustainability strategy, policy and targets, value chain issues, environmental impact, Greenhouse Gas disclosure and social engagement. Companies must now include ESG in their strategy and business development and should start planning accordingly on how they will achieve this.”

The publication of the Net Zero Readiness Index came ahead of November’s crucial COP26 Climate Summit in Glasgow. The United Nations outlines that greenhouses gases in the atmosphere are at their highest level for three million years, driving a global temperature increase of 0.85 degrees Celsius between 1880 and 2012 and a rise in sea-levels of 19cm. Political and business leaders are becoming increasingly aligned that immediate action is required to stop the catastrophic social, environmental and economic impacts further temperature rises could have on the planet.

Published : November 26, 2021