Former Sinopec Chairman Says Chinese Executives Think Climate Change Can Wait

Perhaps an ex-Big Oil executive is an unlikely candidate to open a forum on sustainability. Yet on Wednesday at the inaugural Fortune Global Sustainability Forum in Yunnan, China, the former chairman of CNOOC and Sinopec, Fu Chengyu, was first to take the stage—and delivered a pressing, if unexpected, message.

“Urgency is really the problem that business leaders need to focus on, because a lot of things are happening very quickly,” Fu told the audience.

Last year, climate scientists warned the world had 12 years to tackle climate change. This year, some climate watchers shortened the deadline by 18 months. Now, just last month, McKinsey & Company released a report that declared the world has already reached a tipping point on sustainable issues: with climate impacts already locked in for the next decade, change needs to happen now.

Fu’s comment was really directed at industry leaders in China, whom he thinks have grasped the importance of sustainability but have failed to prioritize it. Fu said that some corporations are reluctant to embrace sustainable initiatives because of the costs of making equipment or procedures more green. That objection is not unique to Chinese business; nevertheless, Fu dismissed it as a fallacy.

“You need to spend money to upgrade our facilities, but that’s a one-time payment and over the next ten, 20 years you’ll continue to make profit,” Fu said adding that, in fact, “greening” facilities can ultimately save money by lowering energy costs.

However, as businesses in China continue to drag their feet on implementing environmental protections, Fu believes the government needs to do more to encourage them. For example, China currently operates a national “cap and trade” market for carbon emissions. The scheme was inspired by a similar policy in the EU and so far runs across seven pilot zones in China.

Under the initiative, each zone has a cap on total carbon emissions. Companies can then bid and trade for greater allowances. But Fu says placing a cap at a provincial, or “zone” level isn’t good enough: “They need to give a cap to every company.”

That sort of heavy-handed governance certainly wouldn’t sit well in the U.S. but in China, where some of the largest polluters are also state-owned, it could easily happen. If only they had a sense of urgency.

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