Asian companies are increasingly setting climate targets but many of them don’t have a clear plan for how to achieve those goals, a senior official at Schneider Electric SE said.

The comments highlight the stark reality of gaps between companies’ ambitions for deep decarbonisation, and the tools available to help them to transition to cleaner sources of energy and more sustainable operations.

About a third of firms adhering to the Science Based Targets initiative - a corporate climate action network - are from Asia, said Farrukh Shad, head of the French electric products manufacturer’s sustainability business in Asia Pacific, India, the Middle East and Africa.  

“94% of the companies have targets but half of them don’t know how to get there,” he said at a panel at Bloomberg’s Singapore Sustainable Business Summit on Wednesday. 

Financial institutions can play a role in bridging that gap by helping companies plan their transitions and offering as incentives, better terms for sustainable projects, said Bangkok Bank president Chartsiri Sophonpanich, who spoke on the same panel. Government-led policies like carbon trading are also crucial, he added. 

The panelists highlighted the opportunities made possible by expanding climate disclosures and making them mandatory.

Greater corporate disclosure around climate is seen helping companies attract investors to finance their decarbonisation goals, and the changes could benefit firms with global operations and obligations under multiple climate reporting systems. 

The European Union’s Corporate Sustainability Reporting Directive, for instance, is set to affect thousands of companies, said Farrukh.

  - Bloomberg