Outlook for Sustainability

Sustainability will foster Singapore’s economic and business growth.

To understand how Singapore values sustainability, consider how it has managed its water supply. With no resources of its own, the city suffered severe water shortages in the past. But now it produces much of its own water through desalination and by treating used water. Its water industry pumps S$2.5 billion a year into the economy.1

Singapore has long integrated sustainability into its economic planning and activities. And now it sees economic growth through green industries and more sustainable use of resources as essential to its long-term economic development.2

From developing ‘super low energy’ buildings and green housing estates to imposing a carbon tax, Singapore is stepping up efforts to reduce its carbon footprint and mitigate the impacts of climate change. And businesses, like other sectors of the economy, are expected to do their part. But they can also gain by capturing value for their organisations.

Here’s what businesses can expect from Singapore’s drive to become more sustainable.

Going green can unlock future prosperity for companies.

New policies to make inaction costly

The Singapore Government is the driving force behind the shift towards sustainability as it works to meet its Climate Action Plan. Businesses can expect the government to review existing policies and roll out new ones – and failure to keep up with these changes may be costly.

The carbon tax, for example, will be a substantial new cost for large carbon emitters if they don’t cut their emissions of several greenhouse gases. The government expects to collect almost S$1 billion in carbon tax revenues in the first five years under the new tax alone.3

Other businesses will feel the knock-on effects of increased energy prices as large polluters try to pass on the tax.

Outlook for Sustainability - HSBC SG Business Banking

Businesses will catch up

A growing number of Singapore businesses are setting the bar high in sustainable practices, and this is likely to encourage other companies to follow their lead.

Large corporations such as City Developments, CapitaLand and Singtel now rank among the world’s most sustainable.4 Property group Ho Bee Land has developed a green finance framework with HSBC Singapore to enhance its sustainability practices. With HSBC’s help, the company secured Singapore’s first green loan in 2018.

In 2019, HSBC Singapore and OCBC Bank arranged a S$248 million green development club loan for Soilbuild. The property company has been developing buildings with green designs and now also uses sustainable finance to lessen its environmental impact.

S$1 billion set aside by government for research on urban solutions and sustainability planning.


Demand for green products to grow

Demand for eco-friendly products and services will continue to grow – and this will have consequences for supply chains. According to a YouGov survey, more than half of Singaporean respondents believe businesses must ensure their supply chains don’t harm the environment.5

To earn customers’ trust, businesses will have to show that they care not only about their bottom lines, but also about the environment.


Outlook for Sustainability - HSBC SG Business Banking

 

More programmes to support businesses

Singapore has introduced several funding schemes to help businesses achieve growth through sustainable practices. These include the Productivity Grant (Energy Efficiency) and the Energy Efficiency Fund, which encourage companies to become more energy efficient.

The government also set aside S$1 billion for research on urban solutions and sustainability planning.6 It is expected to offer more grants and assistance in the future.

How can we help today?

  • Learn more about sustainability and why it’s important.
  • Read about what sustainability means for Singapore SMEs.
  • Find out more how HSBC can help you build a more sustainable business through green financing solutions.

 

1 Channel News Asia, ‘Singapore water industry contributes S$2.5b in value added to economy annually, creates 14,400 jobs to date’. https://www.channelnewsasia.com/news/singapore/singapore-water-industry-contributes-s-2-5b-in-value-added-to-10511576.

2 Singapore Ministry of the Environment and Water Resources, May 2018, Opening keynote address of Minister Masagos Zulfikli at the 5th Singapore Dialogue on Sustainable World Resources. https://www.mewr.gov.sg/news/opening-keynote-address-by-mr-masagos-zulkifli--minister-for-the-environment-and-water-resources--at-the-5th-singapore-dialogue-on-sustainable-world-resources--18-may-2018.

3 The Business Times, ‘Singapore Budget 2018: Singapore to slap carbon tax from 2019, to collect revenue of S$1b in first five years’. https://www.businesstimes.com.sg/government-economy/singapore-budget-2018/singapore-budget-2018-singapore-to-slap-carbon-tax-from.

4 Corporate Knights, 2020 Global 100 ranking. https://www.corporateknights.com/reports/2020-global-100/.

5 YouGov, ‘56% of Singaporeans believe businesses have a responsibility to prevent environmental damage’. https://sg.yougov.com/en-sg/news/2018/01/04/businesses-and-environmental-damage/.

6 Singapore Ministry of Finance, Budget 2020 speech. https://www.singaporebudget.gov.sg/budget_2020/budget-speech/d-sustaining-singapores-success-for-our-future-generations.

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