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Opening Remarks by Ms Indranee Rajah, Minister in the Prime Minister's Office, Second Minister for Finance at The Roundtable for Professional Services on Sustainability on 1 December 2022, The Treasury

01 Dec 2022

Ladies and Gentlemen,


1.  Welcome to this roundtable for professional services on sustainability.

2.  We have convened this roundtable for several reasons:

(a)    Climate change is real and urgent. Sustainability is key to addressing it. Going forward sustainability will be a major engine of growth.  

(b)    this presents real opportunities for Singapore and our professional services;

(c)     we therefore want to share with you some of the plans and strategies in the area of sustainability from the government’s perspective and what we are doing, so that you can in turn develop your own growth plans and help turn Singapore into a hub for sustainability related services  

(d)    conversely, we want to hear from you what is happening in your sectors, so we can all together have a broader perspective of developments. We take a team Singapore approach.

(e)    finally we hope today’s session will serve as a catalyst for greater collaboration and partnership between your respective professional services. It is easy to get caught up in your own sector, that sometimes you don’t realise what’s happening with others. When you put it together, you suddenly realise that there are opportunities.

(f)      Another thing that I am doing today is identifying the gaps. I am pretty sure that there are gaps that we haven’t got covered and we can work towards bridging those gaps.

3.  Let me highlight some of the developments in sustainability both internationally and domestically.

International and Domestic Developments in Sustainability

4.  On the international front, governments are mobilising to address climate change. Decarbonisation has gained momentum over the last few years. By the end of 2021, more than 80 countries pledged to achieve net zero emissions, more than four times the number in March 2020. Over 70 of those these 80-odd countries have pledged to achieve net zero by mid-century in line with the Paris Agreement goal to prevent the temperature rise from exceeding 1.5 degrees,

5.  COP-26  saw the finalisation of the Paris Agreement rulebook, which included rules for international carbon markets.

6.  At COP-27 this year, further efforts have been made to ensure transparency and trust in the carbon market, such as the reporting and infrastructure requirements for cooperation under Article 6.2.

7.  Major countries and companies have also been making substantial investments in decarbonisation technologies – global investment in energy transition hit a record high of over S$1 trillion in 2021, that’s an increase of 27% over the previous year. Private financing is also shifting towards sustainability and low-carbon projects.

8.  While the Russia-Ukraine War and ongoing energy crisis has put up a bit of a road bump  – forcing some countries to resort to traditional carbon-intensive sources of energy to meet their short-term energy needs – the fact remains that clean energy remains on a forward trajectory.

9.  n fact, the energy crisis is accelerating investments in renewable energy to boost energy security. The International Energy Agency (IEA) expects clean energy investment in 2022 to top $1.4 trillion, a significant increase from the past years.

10.  And notwithstanding Russia’s invasion of Ukraine, no country has reneged on existing climate commitments made to the United Nations Framework Convention on Climate Change (UNFCCC). Instead, countries like Australia and India have enhanced their 2030 pledges, with several other nations expressing their intention to also do so before the end of the year.

11.  Keeping the pace with international developments, Singapore has raised its national climate target to achieve net zero emissions by 2050. It sounds like a great target, but it is not going to be an easy transition. This will be done by:

a.  Economic transformation of existing industries towards a low-carbon future, for example by decarbonising legacy products and processes; you can already see that opportunity there for those who are doing consultancy, because you are going to advise your clients on these.

b.  Promoting economic activities in low-emissions industries, for example steering demand towards low-emissions products and processes replacing high-emissions options. The construction industry is going to be one of those who is trying to reduce the amount of carbon in construction.

c.  Progressive raising of carbon tax from current S$5 per tonne of emissions to S$50 to S$80 per tonne by 2030.

d.  The Singapore Green Plan 2030. This sets out ambitious concrete targets to advance our national agenda on sustainable development. It is a very comprehensive plan that sets out the key targets and agenda, as well as opportunities for your professional services sector. I would urge you all to check it out if you have not already done so.

Sustainable Finance and Sustainability Reporting - Key Enablers of the Sustainability Transition

12.  The period between where we are now and where we want to be is the sustainability transition. It will take time and effort to reach our sustainability goals. Today I would like to focus on two key enablers of the energy transition: sustainable finance and sustainability reporting. While this may feel more relevant to some sectors than to others, the reality is that this is all linked. The accountants and the lawyers may be advising clients directly on this, but it is going to have an impact on the architects and engineers.

Sustainable Finance

13.  Sustainable finance enables effective capital reallocation towards low-carbon intensive activities to create a better environmental outcome.

14.  Recognizing this, considerable effort is being made both internationally and locally on sustainable finance.

15.  On the international front, efforts include the following :

b.  G20: The 2021 G20 Italian Presidency has re-established Sustainable Finance as a key priority. The G20 Sustainable Finance Working Group (SFWG) aims to establish high-level and forward-looking priorities for scaling up sustainable finance, to support the objectives of the 2030 Agenda for Sustainable Development and the goals of the Paris Agreement.

c.  ASEAN: The ASEAN Taxonomy Version 1 was released in 2021 by the ASEAN Taxonomy Board. It is an inclusive and credible classification system for sustainable activities which takes into account the diversity of ASEAN countries and establishes a common language for sustainable finance among ASEAN member states. It is one of the key building blocks in attracting investments and financial flows into sustainable projects in the region. That’s why Singapore is paying so much attention to it.

d.  APEC: This year, the priorities for Thailand as the host of APEC include sustainable finance. Tools, policies and best practices in the fiscal policy domain and in the financial market will be explored to promote green growth and sustainable finance. In the spirit of knowledge sharing, economies discussed the development of a capital market-friendly ecosystem for sustainable and transition finance amongst others at the recent Seminar on Developing the Ecosystem for sustainable finance in the capital market.

16.        Singapore’s vision is to be a leading centre for green and sustainable finance in Asia and globally. Currently, Singapore is the largest market for green and sustainability-linked loans and bonds in ASEAN.

a.  Asia’s transition to a lower carbon future will not be easy. About 85% of the energy produced comes from fossil fuels, and demand is likely to rise on the back of continued urbanisation.  Some 45 million people in Southeast Asia are still without electricity. 

b.  Asia must find ways to transit towards greater sustainability while at the same time securing economic and social development for its people. Sustainable finance can be a powerful enabler for Asia to achieve an effective yet inclusive transition to net zero.

c.  It is estimated that about US$275 trillion in cumulative spending on physical assets, or approximately US$9.2 trillion per year globally is needed from 2021 to 2050 to deploy new physical assets and decarbonize existing ones. However, we are short of the annual investment required by 35%.

d.        As Asia makes its transition to net zero, Singapore can be Asia’s centre for sustainability solutions. MAS has identified sustainability as one of the key pillars in their Industry Transformation Roadmap 2025.  There are three key priorities under this pillar, which MAS will be elaborating in their presentation –

(i). To promote sustainable finance solutions in Asia, including scaling up blended finance instruments to de-risk projects and crowd in private capital.

(ii)  Strengthen definitions, data and disclosures through development of taxonomies and technology platforms to support the green finance ecosystem.

(iii)  Deepen sustainable finance capabilities through anchoring green finance centre of excellences, and partnerships with the Institute of Banking and Finance. 

Sustainability Reporting

17.  Sustainable finance can only work if there are reliable and accurate data and disclosures that ensures proper accountability and governance. This is increasingly important for investors and consumers with the heightened risk of greenwashing. In fact, it has been said – ‘get the reporting right and sustainability will follow’.

18.  In Singapore, from the financial year commencing 2023, TCFD-aligned climate reporting is mandatory for listed issuers in the financial, agriculture, food and forest, and energy industries. This is followed by listed issuers in the materials and buildings, and transportation industries from FY2024. Other issuers must conduct climate reporting on a comply or explain basis.

19.  We are also developing the roadmap to advance mandatory sustainability reporting beyond listed companies. ACRA and SAC are working on the following initiatives, which ACRA can elaborate on later in their presentation:

a.  ACRA and SGX RegCo have formed the Sustainability Reporting Advisory Committee (or SRAC, in short) comprising of industry stakeholders:

(i). SRAC has studied the various reporting standards, bearing in mind the need for international convergence while considering the practicality and relevance of different standards. 

(ii). With investors demanding more credible sustainability-related information, the Committee is also looking at the need for external assurance of sustainability reports to be filed by companies.

(iii)  The Committee intends to issue its recommendations for public consultation next year. Please do participate if it’s relevant to your organisation.

b.  Due to the nascent stage of sustainability reporting, we need to step up in capacity and capability building to support the implementation of SRAC recommendations. This applies not just to companies based in Singapore, but their investments overseas. Unlike the financial reporting eco-system that had the time and space to grow over decades, we are also working on a compressed timeline for sustainability reporting.

(i)  ACRA will assist Enterprise Singapore to incorporate more targeted content into the sustainability courses under the Enterprise Sustainability Programme. ACRA will also work with Enterprise Singapore to curate more advanced training courses and provide other support for assurance service providers. 

(ii)  To build the pipeline of talents into this area, SAC is working with SkillsFuture Singapore to integrate Sustainability Reporting into the Skills Framework. SAC is engaging with Institutes of Higher Learning, to understand how ESG/SR can be better integrated in their curriculums.

Opportunities for Professional Services

20.  Turning to the opportunities for professional services, I would like to highlight once again that sustainability is a huge growth area for professional services firms, especially in green finance and sustainability reporting. Professional services play a critical role in advancing the sustainability agenda. Everyone has a part to play, and value to capture.

a.  Accountants help companies to assess the impact of business decisions and environmental practice on financial performance. Accountants also provide assurance on sustainability reports, increasing confidence in consumers and investors to buy from and invest in sustainable companies.

b.  Consultants help to transform companies in every aspect of their strategy and operations to realise their sustainability goals, for example formulating financial strategy and policy based on sustainability considerations, helping to implement the TCFD framework and more.

c.  Lawyers help lenders and borrowers to structure transactions in accordance with sustainable financing principles, industry standards and frameworks. They advise on legal risks arising from sustainability disclosures under various ESG frameworks and compliance requirements.

d.  For those in the built environment sector - architects, quantity surveyors and engineers, you are helping to green our buildings and infrastructure projects that form the subject-matter of green investments and disclosures. 

21.  There is scope for closer collaboration between the professional services groups to reap synergies and capture opportunities together, whether through cross-learning, co-creating multi-disciplinary solutions to climate-related transitions, cross-referrals and joint marketing and pitching for work.

22.  I would like to encourage the start of such conversations today, and hope that by the time this session is ended, all of you will leave with new perspectives and new connections.

23.  With this in mind, please:

a.  Share generously about the developments in your sector and the challenges and opportunities faced in your practice in this roundtable and breakout room session;

b.  Be curious about the developments, challenges, and opportunities in other sectors; and

c  consider how professional services can work together to increase access to opportunities.

24.        This is a new area and I wouldn’t say that we are completely in the forefront, but we have frontrunner advantage in some areas. And so all of you, in your respective professional services, should really leverage on this so that we can make Singapore a force to be reckon with in the sustainability space.

25.        Thank you very much.