Capitalising On The Growing Green Economy
Sustainability in Business, Sustainability as Business.
The United Nations Climate Change Conference (COP26) in Glasgow concluded on 13 November to mixed reviews. The debate on whether the annual conference accomplished enough for climate change is unlikely to quell, but on the other hand, the net-zero pledges made by both the public and private sectors have made it apparent that the acceleration of climate action will reshape business models forever.
In the last two years, Singapore has submitted enhanced Nationally Determined Contributions and launched the Singapore Green Plan 2030, which sets out concrete plans to achieve its net-zero goals and now intends to review its overall climate goals further. The government, large corporations and investors are collectively setting ambitious sustainability targets, which extend to all their stakeholders across value chains.
Singapore is also making progress with its sustainability targets on several fronts. For instance, the government is looking at various strategies to decarbonise its electricity grid, including increasing solar power and importing low carbon energy from the region. The GreenGov.SG initiative aims to drive the public sector to focus on sustainability outcomes while new green standards and legislation, such as the new BCA Green Mark 2021, mandatory energy audits, and Extended Producer Responsibility-related regulations are being progressively rolled out.
Growing impetus to pivot
Against the backdrop of these increasing net-zero commitments, Singapore businesses have been following the conversations on climate change more closely than ever. For a start, companies stand to gain a competitive advantage by integrating sustainable practices in their businesses.
As a small, open, and export-oriented economy, Singapore relies heavily on external demand. With global consensus to pursue sustainable development and a changing regulatory landscape in favour of greener policies, there is now a premium on businesses that strive to achieve sustainability goals with concrete actions. Singapore companies can either ride on this wave for growth, or risk being left behind amidst the rapidly changing business landscape.
Leveraging support and financing
The pivot to more sustainable practices does not have to be complicated, nor should it be exclusive to large companies that can dedicate resources to monitor and implement sustainable practices.
For example, the adoption of readily accessible waste management strategies, energy efficiency or digital solutions can bring about cost savings and productivity improvements, while simultaneously ensuring that companies can contribute towards environmental sustainability. Of note, Singapore companies can leverage existing support schemes, including the new Enterprise Sustainability Programme, to adopt green solutions and build sustainability-related capabilities.
Increasingly, the financial sector is also recognising and acting on its crucial role as a catalyst for sustainable financing. Private-public collaboration has been key in breaking down the barriers to green financing for many Singapore companies. Such initiatives include sustainable financing frameworks adopted by respective banks, government support aimed at defraying the cost of engaging sustainability advisory and assessment services for loans, and industry-driven efforts by the Green Finance Industry Taskforce to accelerate the development of green finance.
By and large, the interest and development of green financing in Singapore reveal two important points. Firstly, businesses can make use of existing frameworks and support to actively pursue green projects and more sustainable practices. Secondly, the integration of sustainability criteria into financial services could eventually restrict access for financing to only companies with sustainable practices.
Capitalising on green business opportunities
Companies are also quickly realising that sustainability does not have to be a zero-sum game. Gone are the days where sustainability was treated as a ‘good-to-have’ and a perpetual cost centre. According to the Singapore Business Federation’s latest policy paper on sustainability, there exist green business opportunities for Singapore companies, including capitalising on international demand for energy efficiency solutions, re-positioning existing data-driven solutions to also serve the green market, responding to a growing demand for green solutions and products, and recognising the unique value proposition of recycling.
‘Sustainability as business’ is a growing trend with businesses pivoting to new solutions, products, and markets attuned to serve the green economy. SMEs make up the backbone of supply chains and are key to advancing the green agenda in Singapore, with many already at the forefront of these efforts.
GUAVA Amenities is one such example. The company first discovered that sustainability could give them a key competitive advantage when their decentralised manufacturing model and shorter shipping distances resulted in carbon savings for their clients. The company has since responded to their clients’ demands for more sustainable solutions, to offer more solutions, including the use of sustainable packaging for their products.
Businesses can and will continue to play a pivotal role in accelerating the green economy. Through working together with other industry and public sector stakeholders to identify, prioritise, and act on new green opportunities, including building a pipeline of talent to services these new sectors, everyone can be a part of Singapore’s transformation into a ‘Bright Green Spark’.
To find out more about how Singapore companies can capitalise on environmental sustainability for growth, visit https://www.sbf.org.sg/images/SBF_Sustainability_Policy_Paper.pdf to read SBF’s latest policy paper on sustainability.