The report highlights the importance of understanding climate risks for businesses in Asia. Extreme weather conditions are becoming more frequent, causing environmental, economic, and social damage. However, the transition to a low-carbon future also presents opportunities in emerging industries such as renewable energy and electric vehicles. While companies in Asia are aware of climate risks, a material understanding remains lacking, which could hinder their ability to adapt and capitalize on these opportunities. Asset owners and managers are increasingly incorporating ESG considerations into their investment decisions, but the quality of ESG reporting remains uneven across geographies and industries, particularly in Asia. By engaging with portfolio companies on material ESG and climate risk issues, asset owners and managers can encourage companies to adopt higher disclosure standards and align their reporting to internationally recognized frameworks such as the Task Force on Climate Disclosures (TCFD). Companies with a material understanding of climate risks and opportunities are better able to incorporate them into their risk management and strategic planning, and build more sustainable enterprises.
