Why It’s So Hard to Reduce Emissions in the Supply Chain

(Bloomberg) -- As told to Bloomberg News

It's the carbon footprint in the supply chain and how little companies have done to address this issue. China is the workshop of the world. Many international investment funds are proclaimed as ESG [environmental, social, and governance] investors, but there is a big gap between their Chinese investment and what they claim to be.

The problem itself alone is not enough to keep me up at night. It's more worrying that most multinationals are still reluctant to face up to the problem and are refusing to take swift actions even when there are solutions out there.

If these multinationals care, they can motivate change, such as including emissions-reduction requirements in their supplier procurement standards. They should exert influence.

The picture of climate change is worrying. With the U.S. pulling out from the Paris Agreement, the global solidarity has taken a toll and the peer pressure hence weakened. As countries are battling with domestic issues, climate change is less prioritized on the governments' agenda. To keep global warming within 2C to 1.5C, the target laid out in the Paris Agreement, market-based solutions that balance development and climate objectives are essential.

In China the economy slowdown weighed on the government'sclimate ambition. Among local governments, there is an outcry to relax the carbon emission efforts and law enforcement to maintain GDP performance. In the past two winters, we noticed that some high-energy-consumption industries increased production activities.

With China's economy taking another blow from coronavirus, we foresee that the Chinese government will flesh out a stimulus package, which would bring sustainable impact to energy consumption and carbon emission. Translated from Mandarin

Ma Jun is the founder of the Institute of Public & Environmental Affairs, a nonprofit environmental research organization in Beijing

With assistance from Bloomberg