Hiss or Miss? What’s in Store for the Year of the Snake?

Hiss or Miss? What’s in Store for the Year of the Snake? Enter the Wood Snake, a powerful symbol of wisdom, rebirth & rejuvenation with its ability to shed its skin. And with the Wood element’s flexibility & tolerance, 2025 will be a year of powerful transformations. All very apt given escalating climate risks & volatile global geopolitics!

So against these tectonic shifts, we dive into the climate strategies of some top HK listco’s to find that some are leveraging climate risks to find serious savings while others are ill-prepared. We also look to see what HK can do to transform into a trailblazer beyond net zero, plus deliver tips on what’s hot & what’s not in the water-climate space in our 5 trends for the Year of the Snake.

But before we get into what the Snake holds, some news from us. In the spirt of transformation, we’ve also revamped our website to better reflect the fast-evolving risk landscape. We’ve carved out a section on Risks so that you can easily get on top of, value, benchmark & stress test escalating risks plus we added a Rethink section to reflect our work on transition & development to “slow down” these risks. Finally, as tomorrow’s risks are happening today, there’s a section on Resilience to help you adapt, adapt, adapt & curate better climate strategies that are aligned.

Hopefully, these will help you navigate ever-widening climate water risk gaps – so, join us to rethink Climate Water Risks for resilience at www.cwrrr.org. But don’t worry, all the links to our old website still work. And we’ll still cover China regulations with regular reviews/opinions on China. Plus, all the good old stuff  like our Resource library and 8 Things + 5 overviews are still there!

So, what can you expect for the Wood Snake year? Snakes represent danger across multiple cultures and with global heating for 2024 hitting 1.55°C, we’re now in a dangerous world. We have to recognise the harsh truth that although 1.5°C is still “technically possible” with deep cuts of around 24GtCO2e by 2030, it is “no longer practically possible unless all NDCs are improved. Sadly, just this month, we saw 95% of countries miss the deadline to submit new UN climate pledges.

Climate & water risks will thus continue to slither ahead at top speed while adaptation efforts are stubbornly slow, or worse still lacking. These gaps mean it’s adapt or die for the insurance & banking sectors. As it is, persistent acute risks are already accelerating the end of insurance as we know it today, not tomorrow. But it’s not just finance, climate risks can make other sectors obsolete unless they innovate and transform.

Indeed, the great game of snakes & ladders has started – corporates, industry sectors, finance & governments are all players – they can either ladder up by recognising the risk & building adaptation or risk sliding back to zero. Here we see some corporates surge forward or fall behind in tackling rising risks.

First off, payback can be immediate for acting now as Link Asset Management shows – it was able to reduce its insurance premiums by stepping up flood adaptation. Check out our conversation with Dr. Calvin Lee Kwan, Link’s Head of Sustainability & Risk Governance.

He walks us through adaptation measures they took to address flooding that hit multiple Link assets which were hit by the black rainstorm in 2023 which not just delivered savings but for the first time ever a 2 yr term instead of annual renewals from its lead insurer. Check out their 6 key strategies + insurance roadshow to up confidence in its risk mitigation efforts.

There’s clear savings to be made if risks are recognised and mitigated but our new report on the Top 4 HK property developers revealed a mixed picture. Top tycoons in Hong Kong are behind on climate risks. A review of their climate strategies showed that only one company’s disclosed physical risk levels matched our stress test results – CK Assets Holdings. The other 3 “had a poor grasp of risks” – Henderson Land Development, New World Development & Sun Hung Kai Properties.

We had expected them to do better on resilience to lower premiums (like Link) and preserve asset values for future sales, yet all four developers’ disclosed adaptation plans failed to address their own disclosed risk levels, let alone the risk levels shown by our stress tests! Plus not all have set net zero targets.

Some of them didn’t even bother stress testing for fast rising seas; the first risk highlighted by the UN Secretary General at Davos last month: “sea-level rise, heatwaves, floods, storms, droughts and wildfires – are just a preview of the horror movie to come”. We cannot agree more – our stress tests show that 18% of a single developer’s assets are on track to be permanently submerged by 2070 if emissions continue!

Clearly the 4 tycoons are in for “snakes” instead of “ladders” – their significant stakes in listed companies with assets worth over HK$2.3trn (US$295bn) could be in for asset write downs and insurance hikes galore if they face real risks ahead and don’t re-align their climate strategies and build adequate climate defence – a shocking 37-56% of their properties could be at risk from “unlucky” storm tides today.

Yet, these real estate companies cannot be truly protected from rising seas unless the infrastructure around their assets are also protected. But, a city-wide adaptation plan that addresses escalating climate risks from the HKSAR government is still missing.

As rising seas are existential for HK, the government should also do whatever it takes to “slow down” rising seas by delivering emission cuts beyond HK’s scope 1 & 2 net zero targets. Here we turn to IXO Partners, a decarbonisation engineering and advisory firm for the low down of what HK can do.

IXO’s founders Lizette McNeill and Vimal Karpe believe that HK’s local building regulatory ecosystem is uniquely positioned to adapt to a new normal & become the trailblazer for climate resilience cities. But only if it acts quickly & methodically. See how to unlock investment opportunities with their 5-prong recommendations.

Surely, the SAR should channel the snake and transform into a global transition leader as well as deploy IPCC’s transformative adaptation to up climate defence. The low-lying Northern Metropolis presents a clear opportunity – HK should ladder up and make it a shinning example of future resilience.

There’s no time to waste as we are standing at the cusp of various planetary tipping points. The majority of these are related to our cryosphere which is crying for help today and its plea can no longer be ignored. To avoid crossing key tipping points, we’ll be unpacking these complex “hidden” cryosphere risks from SLR to freshwater reserves, ocean currents plus more next month on World Day for Glaciers – so stay tuned!

In the meantime, channel the snake – face reality and transform. Dare to let go of things that don’t work and slither into new beginnings. Start by shedding those rose tinted glasses on a viper pit of climate impacts ahead. Then strike at the core and don’t let geopolitics distract – climate change waits for no one.

Hiss, don’t miss! Risks are moving faster than we’ve ever imagined – so we must imagine even more! Tackling complex challenges & finding a way forward is what we do best – rise to the challenge and join us to futureproof Asia!