5 Trends For The Year Of The Tiger

Roaring tiger or wet cat? We said last year that it was premature to think “it will get back to normal” in the Ox year and we were right. However, since we are now leaping into an action-packed year with the Tiger, expect expansion in 2022 to be aggressive and bold.  But can we harness the power of the Tiger whilst tempering its brash style to avoid stoking conflicts? Find out what’s in store this year in our 5 Trends for the Year of the Tiger.

The Water Tiger brings both good and bad news. There is no life without water and so water is seen as an amplifying force. The good news is that we can ride this “Water Tiger luck” to expand out of COVID, the bad news is that water risks and disasters will also be magnified.

It’s only February and already hundreds of thousands are affected by floods, snowstorms, hurricanes and hail all  around the world (see Tapping In column) or check out our Trend #1 “Extreme weather ahead! Water tiger is difficult to tame; once unleashed expect havoc”.

Basically, the Water Tiger will bring new meaning to the phrase “raining cats and dogs” but a wet cat is not a happy cat, so the Tiger year is also all about adapting to the new climate future. Building resilience to no regret scenarios will be key to ensure our paws stay dry.

Here we think that bankers and their regulators can be the crouching tiger, hidden dragon – they have the ability to cataylse big change – capital can be driven towards aggressive adaptation and decarbonisation actions that protect the planet, not those that destroy it.

The urgency and case for action has also increased with rising water & climate risks. It’s not just us saying it, in case you have missed them, we have summed up the key findings from 5 reports on rising risks released in just the last four months from the World Economic Forum to the Hong Kong Monetary Authority (HKMA).

Did you know that the HKMA’s stress test showed that HK$2.9 trillion or 28% of lending from 27 banks in Hong Kong are vulnerable to climate impacts mainly from flooding & typhoons? These numbers are sobering enough for banks to act so corporates should also take note.

Climate risk assessments are a must-do first step to gauging risks ahead. But to stay away from getting drenched/ drowned, they have to be realistic. Yet, even the “greenest” companies need to improve their assessments as our analysis of New World Development (NWD) shows.

An Unlucky Typhoon Mangkhut would impact 43% of NWD’s properties in Hong Kong – see map. Yet, in NWD’s latest sustainability report they say “Only minor impacts related to flood risk are observed in the long-run for properties in Hong Kong that are located close to the coastline (i.e. susceptible to sea-level rise). This is predominantly due to Hong Kong’s robust drainage network and sufficiently high seawalls.” 

A storm like Mangkhut is expected to happen annually by 2050. Plus the IPCC warned that sea level rise (SLR) of 2m by 2100 and 5m by 2150  of “cannot be ruled out” if we are unable to rein in emissions; Hong Kong adaptation plans for SLR so far are at around 0.5m.

We wish this wasn’t true but when it comes to rising seas, it’s a jungle out there and smoke signals from polar ice really do not look promising. If you are not up to date on these – take a tour with our summary of the latest in “On Thin Ice: 5 hot trends for rising seas” – from a hotter Arctic, record-breaking ocean warming, to the implications of the collapse of an iceshelf equivalent to the size of Florida.

Each trend is alarming on its own but together they are terrifying. Since these 5 observation trends only surfaced in the last two months, we have likely under-estimated the impact timeline of worst-case scenario outcomes. This means that those in their 20’s today could see a rapid jump in SLR  by the time they are in their 50’s or so.

We don’t want the stats and info above to dishearten NWD or any other corporate from carrying out climate risk assessments – quite the contrary, we want to see more but they must be realistic, so check out our tips.

Today, companies can no longer afford to be Paper Tigers – all roar but no teeth – given the mounting risks. Instead, be transparent about net-zero. Be brave, do not cower away from daunting water challenges like a scaredy cat but instead harness the Tiger spirit to strike out new paths towards resilience. Indeed, bold companies have announced water neutral or water positive targets (a newly popular concept) alongside their carbon neutrality targets.

But since there is no global agreement on what “water neutrality” is and how it’s applied, the concept is being used inconsistently and in ways that may threaten a company’s brand and will likely underdeliver on ecological improvement. To help make water positive goals realistic, there is Volumetric Water Benefit Accounting. We sat down with one of the creators of VWBA, Paul Reig, CEO of Bluerisk, to learn more.

Be prepared! The Water Tiger is unleashed … there will be havoc and rising emissions point to even more mayhem ahead. Many will suffer in the new climate reality and there will be many unhappy factions. As usual the rich will fare better than the poor but no one will be left unscathed.

As historic events no longer point to future events, it’s time to let go of the past and feel the pull of the future in the Year of the Tiger. And that is exactly what Singapore is doing. In the city-nation’s 2022 budget speech on Feb 18th, a steep rise in carbon tax as well an update to its climate target, now aiming to achieve net-zero carbon emissions “by or around” 2050 was announced – get the lowdown on this with Liang Lei from EcoBusiness. As for what Hong Kong should do … catch us on the panel at the AECOM-ICE joint event, “Post-COP26: Charting a Net-zero Carbon Path for Hong Kong’s Next Metropolis”.

Fundamental & tough changes will have to be made to avoid further warming but we will not be able to reduce climate risks to zero. Unless we adapt, we are literally staring at the “eye of the tiger” before it devours us. If you are now humming the theme song from Rocky … you are on the right track – we will be hit but we’ll have to get up, only to be hit again – it will literally be a fight for survival for many this year.

To survive the eye of the tiger bold and aggressive actions to avoid Atlantis are favoured – those who can navigate BIG risks can benefit with BIG gain. There is much work to do and so there will be no place for mediocre/ so-so/ careless action – which incidentally in Chinese is summed up by the phrase 马马虎虎 (mǎ mǎ hǔ hǔ) in short “neither a horse nor tiger”.

So don’t horse around; find the Tiger in you and ROAR! Do stay nimble and adapt so you don’t get drenched, soaked or sunk. Enjoy its vigour but don’t give in to its rage. Be aggressive but collaborative at the same time.

Do all this and you will see roaring success. Don’t, and your inaction this Tiger Year will come back to bite you in the future.

So … roar on! Here’s to a healthy and prosperous Year of the Tiger!