5 Trends For The Year Of The Pig
By Debra Tan, Dharisha Mirando, Woody Chan, Chien Tat Low, Dawn McGregor 18 February, 2019
Prosperity will not come without hard work this year so get a headstart with our 5 Trends
Pigs in the Chinese horoscope are associated with wealth and a carefree life – they don’t need to work too hard, are lucky and see success in most areas. They are generous but somewhat lazy, indulging in the “good life”. But before we foretell what the Year of the Pig brings for water, let’s see how we fared on our trend predictions for the Year of the Dog…
Prosperous Pig or Lazy Swine?
We said China would flex top dog muscles & unleash watchdogs with teeth…
…it did not disappoint
We said that China would flex top dog/top down muscles and unleash watchdogs with teeth in the Year of the Dog. It certainly did not disappoint with even more laws and regulations. Most importantly, it took the plunge and implemented fundamental reform of its environmental and natural resource management ministries in an effort to manage its national resources holistically. This pervasive reform provides the base from which to build a Beautiful China and is essential in balancing the economy with the environment. Don’t take our word for this, read Asit K. Biswas’s views, he only advises 19 governments on all things water!
We also warned new paths will have obstacles…
…enter the US-China trade war, Huawei, battle over 5G supremacy etc.
We also warned that “old paths are likely blocked but then again new paths (Made in China 2025, BRI & circular economy) will have obstacles”. Enter the US-China trade war, ZTE, Huawei, battle over 5G supremacy and so on.
Interestingly, we also said to watch out for the increasing use of publically available environmental data in credit scores – be it for an individual or for companies. Although social credit scores are only now all over the Western press fretting over the start of a dystopian future in China, it’s worth noting that the plan was released almost 5 years ago in June 2014. Indeed back in 2015, we highlighted this grand “National Social Credit System Plan 2014-2020” as one of “8 Game-Changing Policy Paths” – it was in our prediction “Shepard plans surefooted paths toward water security” for the Year of the Goat.
No China U-Turn in the Year of the Pig
No about turn from new paradigm
China is clearly no longer operating under the premises of the old paradigm. This shift (which started prior to Xi’s tenure) will continue in the Year of the Pig. So for those of you, who think that an about-turn is imminent, think again. Turning back is NOT an option – there may be deviations “to let off steam” but the direction is set. The path will certainly not be smooth but China will soldier on towards ecological civilisation.
Short term pain is bearable when you have long term goals…
…China’s economy will continue to take hits but it will become “beautiful”
Why? Because if the economy runs on water and China has limited water, the path to prosperity is to change the economy. And because climate change exacerbates water scarcity, China will remain committed to tackling climate change (albeit currently distracted) in the Year of the Pig.
Short term pain is bearable when you have long term goals. China’s economy will continue to take hits in 2019 and this will hog the limelight. On the flip side, the environment will improve and China will become “beautiful”.
Water & the Earth Pig … as close as mud
Water is money & pig is water; no water = no money
Water is synonymous with money for the Chinese; moreover the Pig is also represented by the “water element”. There is a Chinese saying猪笼入水 which literally translates to “water enters the pig basket”. It alludes to multiple avenues to make money or money coming from many different enterprises or sources. So in the Year of the Pig, it is important to pay attention to water availability to be prosperous!
No water = no growth applies not just for China. Asia faces a triple threat on water accelerated by climate change.
As we said in our key report last year, the picture is not pretty. Almost 2 billion people rely on water from 10 River Basins in Asia – that’s one in two and a half Asians. A total GDP of US$4.3 trillion generated in these basins could be at risk.
We urge you to get on top of this troubling landscape now by seeing the Big Picture, else you may be stuck in the mud.
Climate laziness accelerates no water, no money = no growth
Speaking of climate… the Year of the Dog did not bode well for climate change. A slew of reports came out showing that CO2 emissions rose instead of fell after a 4-year plateau and we are on track to fail the 2°C target, let alone the 1.5°C target.
The consequences are beginning to show…
…still those at the top are not doing enough & we are heading for a 3°C world
The consequences are beginning to show: last August, the southern Indian state of Kerala experienced its worst flooding in a century, leaving more than 1,200 people dead and 1.3 million displaced; three separate record breaking fires ravaged California; and closer to home, Hong Kong barely scraped past Super Typhoon Mangkhut, the second super typhoon in as many years.
Still those at the top are not doing enough. COP24 in Katowice was a disappointment to many: while the talks ended with a deal on putting the Paris agreement into practice, much was left unresolved. What’s worse, the US, Russia, Saudi Arabia and Kuwait joined forces to water down the importance of the IPCC’s findings. This means that we will head for a 3°C world – basically, current action/inaction by government is like putting lipstick on a pig.
Take heed not to be influenced by the Pig’s lazy nature – we need to be three times more ambitious than Paris for 2°C
As we move from the Earth Dog to the Earth Pig, it is clear we need to look after the planet – especially water, the only resource we cannot survive without. Take heed not to be influenced by the Pig’s lazy nature – we need to be three times more ambitious than Paris for 2°C. With only 11 years left to fix things before we are too late, it’s essential not to give in to piggish climate sluggishness. We called for radical ideas and the Pig Year already kicks off the first week with a resolution for a Green New Deal in the US. This is encouraging but it still faces stiff opposition; the future is unclear – good luck. Tick tock.
So what’s in store for the year ahead? Here are our 5 trends for the Year of the Pig:
1. Protecting piggy banks … banks & pension funds rethink material water & fiduciary duties
We have entrusted these financial institutions to keep safe & grow our savings but are they?
Most of us have some savings but we have different plans of how to use these – spend it on your kids’ education, a trip of a lifetime, or planning a quiet retirement. Whatever your intent, most of your savings is in a bank or is managed by a pension fund. We have entrusted these financial institutions to keep safe and grow our savings. However, regardless of risk appetite, you still expect these institutions to consider all fundamental risks. But are they?
There’s a whole set of water and climate risks that are now recognised by various mainstream financial bodies and regulators as material. For example, the Financial Stabilities Board (FSB) even has a taskforce which developed a framework for climate-related disclosures (TCFD). This allows companies to provide information to all stakeholders about how they are planning for climate change and has the backing of financial firms responsible for assets of nearly US$100 trillion.
Our savings are long term – so are water & climate risks…
…these will likely manifest soon – 6 major cities in India to suffer from acute water scarcity and pollution in the next decade
So why is it that asset owners and asset managers have the lowest quality and coverage of climate disclosure reporting? This is hardly comforting. As our savings are inherently long-term in nature, surely long-term water and climate risks should be taken into account?
Without water, our economies would not be able to function, and climate change is already impacting our economic assets as well as our water supplies. These risks will likely manifest sooner rather than later – water expert, Biswas, predicts 6 major cities in India will suffer from acute water scarcity and pollution in the next decade – Delhi, Bangalore, Hyderabad, Chennai, Calcutta and Mumbai – more on this here.
The Pig is closely associated with water & wealth – it is prudent to focus on materiality & not break the piggy bank
Non-disclosure likely means that banks and pension funds are disregarding systemic risks thus shirking their fiduciary duty and putting our savings at risk. So the spotlight is firmly on them for the Year of the Pig. Especially since the Pig is closely associated with water and wealth, it is prudent to focus on materiality and not breaking the piggy bank. It’s time to figure out the impact from worse-case climate scenarios and no-water scenarios.
Please don’t forget about regulations either; they are a significant business and financial risk and in China, multiple industries are already feeling the consequences. Don’t expect this to be a China-only phenomenon either. India recently acknowledged its water woes and policies are expected to be implemented to combat this.
We expect to see both China and India taking the lead. Already they are leading the way in greening the planet, but we expect them to pick up the pace on financial institutions. For China, embedding environmental risks into credit policy is a national strategy endorsed by the State Council. Over in India, a new report estimates that “out of total gross credit exposure of Indian banks, more than 39% is in such sectors where water risks are significant”.
Banks & pension funds need to stop dilly dallying; assess the materiality of water and climate risks or risk a breach of fiduciary duties.
The Year of the Dog also saw financial regulators across the board raising these issues (more here) and we expect this pressure to mount in the Year of the Pig. Banks and pension funds need to stop dilly dallying and not just focus on carbon transition risks but assess the materiality of water and climate risks to protect our piggy banks or risk a breach of fiduciary duties.
This year, the urge to protect piggy banks is strong: watch out for more action and reports that highlight these imminent threats and exposure explicitly.
2. No more piggy back rides … investors/corporates to go the whole hog & map assets
Stop waiting for someone else to sort out your problems
Once you recognise that climate and water risks are real, you’re left wondering what to do about it. It’s especially baffling as we have spent years piggy back riding on governments and development agencies to take action. But the problem is so big that they don’t actually have enough money to do everything. And in reality, 92% of climate finance doesn’t even protect our assets; it’s all going towards projects such as solar farms in the hopes of slowing down temperature increases.
The problem is a lot of our assets and people are clustered in the same regions that are extremely vulnerable to climate and water risks. For example, 33% of India’s GDP is generated in the Ganges river basin, and stretches of it already face extremely-high water stress, which will likely rise due to climate change and as urbanisation cause millions to flock to 45 Indian cities along the river – more in our Ganges Factsheet.
So this year, the business and finance sectors need to step up; stop waiting for someone else to sort out your problems. Because while you wait, you will likely lose your assets that aren’t protected from the next flood/drought/heatwave.
They want frank analysis of the risks posed from water & climate change; & frank analysis means banking on granularity
We recommend you start by mapping your portfolio, because it’s the only way to know which of your assets are going to be affected by climate and water risks. This level of granularity means that you know the hotspots and know your real exposure; otherwise you are blindly making decisions. Yes it’s a lot of work, but you don’t have to map everything, start with regions you are most worried about.
We can’t keep putting off taking action and piggy back riding off government endeavours because it’s not enough. As pointed out in Trend #1 financial regulators and stock exchanges are asking more questions and want better disclosure that goes beyond box ticking. They want frank analysis of the risks posed from water and climate change; and frank analysis means banking on granularity.
In the Pig Year, we expect investors and corporates to go the whole hog and map to protect your assets. Again, you cannot be a lazy swine if you want to be a prosperous pig.
3. Bring home the bacon … science needs to engage business
Scientists can’t stop talking about climate change or releasing large volumes of work on the topic, but are they speaking in tongues? Is it really getting through to governments, businesses and the public?
Earlier this month, we saw the release of a comprehensive 600+ page study of the Hindu Kush Himalaya (HKH) region by ICIMOD. It warns if global climate efforts fail, the current path leads to +5°C in the HKH and a loss of two-thirds of the region’s glaciers by 2100; a critical water source to 1.9 billion inhabitants (250 million mountain dwellers and 1.65 billion downstream).
These findings echo the urgency relayed in our report “No Water, No Growth – Does Asia have enough water to develop?”.
As much as we would like to see such scientific reports push government leaders into action, the clock is ticking down but governments are still largely moving at a leisurely pace in assimilating science into the decision-making process; or worse still denying their relevance like the US.
Current path = +5°C in the HKH & a loss of two-thirds of the region’s glaciers by 2100… but little coverage in press
Yet, scientists are not really aggressively engaging with businesses to fast track action. The “catastrophic” scenario painted by ICIMOD gained little coverage in the financial press even though it was produced by 350+ researchers and policy experts from 22 countries and 185 organisations over a 5 year period; it is not alone.
Many science solutions available to us now still remain under-utilized e.g. 3D printed meat…
…need “serious money” for commercialisation
Also, many science solutions available to us now still remain under-utilized and/or under-funded. Take the case of 3D printed meat. As bonkers as it may sound, this food revolution 5.0 is already here. Even foie gras and escargot can be printed from stem cells as we discovered in our conversation with Professor Kenneth Lee. What’s missing now are some visionary investors to put in “serious money” for commercialisation.
Since a better understanding of what’s at stake will facilitate more funding towards water and climate research; catalyse funding, such as green finance to mitigate and adapt to the risks they are forewarning; plus persuade investors to make more speculative investments in out-of-the-box solutions. But first, the 600-700+ page reports must be distilled into business speak, if not, it’s all lost in translation.
There are multiple gaps e.g. poor communication, mismatched expectations etc…
…only China is putting money in (US$860mn over 5 years)
Poor communication of science to business is a key obstacle, and we have lamented this here and here.Moreover, aside from the lengthy reports, there are fundamental mismatches in expectations – climate scientists work with averages over long time frames to attain a higher level of accuracy, whereas businesses, investors as well as water managers need to understand the extreme scenarios in the next 5-10 years, not 100-200 years.
Also, lack of monitoring limits scientists, so we end up with global/national results. But since impacts on water are regional/locational, we will need to up monitoring and research to provide more granularity. We see China moving to fund research stations in the Third Pole to the tune of up to RMB5.83bn (US$860mn) over five years.
Given the urgency, we could see science go business unusual, not just in their scientific research model, but because Pigs are social animals, we may well see scientists mingling with business to bridge these gaps to bring home the bacon. Who knows, if trends #1 and #2 are right, banks and investors will also be actively seeking their help with scenario analysis. Need a translator? Contact us – we can help!
4. Pigs can fly … stop hamming up business unusual
Businesses are sleepwalking into a catastrophic future
Time is running out – so where are businesses and corporates in the biggest fight for our future? As a key player in determining the course of the climate one would hope they are in hyperdrive, well on the way to business unusual. But no, unfortunately, it is more like first or second gear, for some. They are still mainly focusing on the low-lying fruits of energy and water efficiency and largely being content with that. Basically, they are hamming up our chances for a cooler climate, and sleepwalking into a catastrophic future. The World Economic Forum has already named water-related risks as a Top-5 risk 8 years in a row.
Change is not easy, but change we must. Currently, most of the disruptions in business as usual have come from regulatory action. Plastics is a good example. Action is primarily being driven China’s plastic waste import ban, forcing a change in the current business model. While plastic action is great (see the latest being done in HK here), we may not have enough time to wait for policy to forge a business unusual path for all sectors.
Surely businesses must take a more proactive stance in creating mega disruptions? Again, taking plastics as an example, bottlers are now aiming to use recycled plastic or plant-based bottles. This just tweaks the design (low-hanging fruit), why can’t we just do away with bottles completely and move towards dispensing in convenience stores?
Yes, this would be highly disruptive but we would save the energy and water used in making plastic/plant based bottles AND the energy and water used in powering fridges 24-7 in all convenience stores across the world. Plus there will be no more “waste” as we would only dispense the amount we want and we all know that wasting is a huge contributor to GHGs! Imagine what this would do for the planet but instead, leaders in the industry from Nestle to Coca Cola are still stuck thinking within the box.
Fashion is another area seeing action in circular disruption, mainly thanks to years of NGO pressure (including us!). The industry is self-disrupting although not fast enough given that it hits the “guilty trifecta” of dirty and thirsty with huge impact on the climate; labour issues aside. 40+ global brands including Inditex, H&M, Kering, joined the “Make Fashion Circular” initiative. There’s also visible push from the Ellen MacArthur foundation, ZDHC plus innovative start-ups to transition fashion. So why is circular fashion not more advanced? We sat down with Redress’ CEO to hear about successes and blockages they faced over the years.
In short, it appears that businesses and corporates are taking a reluctantly reactive approach towards business unusual. Faced with a “catastrophic” future, a more proactive approach is needed, with bigger and crazier ideas. Idea labs and scenario gaming can help break our predispositions and mindsets to generate new ideas and unclog blockages; green consumer apps and more collaboration across sectors can help get us there.
Pigs are said to be intelligent, so let’s leverage this year of the pig and be intelligently crazy in going business unusual. Pigs must fly in 2019 – companies should take the wise path and ride the lucky pig to steer the future away from catastrophe towards vast fortunes.
5. Stop pigging out … every one of us can save the planet!
Over the past decades we have gorged on the world’s resources with extravagance…
…it is important to exude exemplary self-control to save the planet
“Char siu” is delicious as is sweet and sour pork … but really, we need to go on a diet. It’s not just healthier but abstinence is key to a happy earth and a prosperous pig year. While it is tempting, pigging out is definitely a no-no. Over the past decades we have gorged on the world’s resources with extravagance, from food and data to fast fashion – enjoying the “good life”.
Such excesses have to stop. For success and fortune in the Year of the Pig, it is important to exude exemplary self-control to save the planet. Although there is a strong focus on coal, we cannot ignore agricultural greenhouse gases (GHG) emissions. Together electricity (25%) and agriculture (24%) contribute to almost half of global GHGs. Clearly, these can be reduced if we stopped feasting like pigs.
If we all changed our diets we can save the entire CO2 emissions of India…
…not wasting your food also helps
Think about this … if we all changed our diets we could be cutting ~2.5GTCO2eq according to a WRI report; this is equivalent to the entire CO2 emissions of India. If changing your diet is too difficult, then not wasting your food also helps. Or perhaps you can feast on a bigger steak if you have no kids? More on this in “Diets, Food Waste & Kids in 5 Graphics”.
Fashion is the 4th largest CO2 emitter after US, China & India… surely we can shop better
Of course it’s not just food where our overconsumption is sending the climate into overdrive. Fashion is the 4th largest CO2 emitter after US, China & India but we are still fuelling fast fashion – how many of us are guilty of buying clothes that just lie in the back of the wardrobe? Left unchecked, fashion will in the next 11 years emit more CO2 than Indonesia, Pakistan, Thailand, Vietnam and Hong Kong combined in 2015 – negating everyone else’s efforts to cut down on energy usage! Let’s face it, we are driving this – maybe we are doing this simply because we didn’t know better. But if we did, surely we can shop better.
Meanwhile, even our internet data consumption has a dark side – it is still powered mostly by coal and thus fuelling the deadly fires in California plus glacial melt in the Himalayas. Take “Despacito” as an example: its carbon footprint on YouTube is roughly the equivalent of the annual emissions of about 100,000 taxis. As online gaming, AI, cryptocurrency and other data-guzzling fads grow, the consequences for our planet are dire.
The good news here is that we as individuals can make a difference…
…change our over indulgent ways & rethink how we consume to save our own bacon!
Pigs are optimistic and the good news here is that we as individuals can change this; together we can affect GHG savings that matter by changing the way we consume. It is in our hands to deliver this; not the governments, corporates, investors or banks; we all know deep down they are moving too slowly.
It is time to own up to our over indulgent ways and rethink how we consume in the Year of the Pig. Better late than never – it could be the only way we can save our own bacon!
Oh, and of course, if you’ve got savings, go bug whoever is managing it; but don’t wait too long!
End of the 12 year zodiac cycle and the beginning of a new era
Be warned, the Pig is the last animal in the Chinese zodiac – so 2019 is the transition year to a new 12-year cycle. Given its association with Earth and Water elements, climate change is no longer about just carbon, we must start planning for its impacts on water in the next cycle.
It doesn’t matter who you are – banks, pension funds, investors, businesses/corporates, governments or individuals – if we still want a good life, we must not channel the lazy swine but capitalise on the luck, success, and wealth aspects of the Pig and bet on radical, ambitious ideas. Channel the Pig’s intelligent nature to make the right decisions today for “water” tomorrow.
猪笼入水! May your pig baskets always be full of water! Happy lunar new year!
- Balancing Economy With Environment In China – Professor Asit Biswas from National University of Singapore looks at how the environment has risen up China’s agenda from his first trip in 1981. Plus, see why he think China will make spectacular progress going forward
- Banking On Granularity To Reduce Climate Blindspots – Climate & water risks are locational but most financial institutions are flying blind, not having mapped their assets. Until they do, they & our savings are exposed. CWR’s Dharisha Mirando expands
- Food Revolution 5.0: Digital Printing Meat – Food Revolution 5.0., clean meat… Hong Kong is there. Get the latest from Professor Kenneth Lee of Chinese University of Hong Kong and hear more on his 3D printed foie gras
- Waste To Fashion In Hong Kong – Redress has successfully sorted 41 tonnes of clothes (=1,240 suitcases – avg check in size). Hear from Anneleise Smillie, Redress CEO, on the good, expansion plans & blockages to their circular work
- Diet, Food Waste & Kids In 5 Graphics – Agriculture emits as much greenhouse gas as electricity and this needs to change. CWR’s Woody Chan sees 3 ways to reduce this, from changing diets and cutting food waste to fewer kids
Read more from Debra Tan →
Read more from Dharisha Mirando →
Read more from Woody Chan →
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Read more from Dawn McGregor →