Speech by Minister for Finance Lawrence Wong at GCNS' 2021 Singapore Apex Corporate Sustainability Awards Ceremony on 9 December 2021

Ms Goh Swee Chen, President, Global Compact Network Singapore

Distinguished Guests,

Ladies and Gentlemen,

Introduction

1.            I am very happy to join you this evening for the Singapore Apex Corporate Sustainability Awards ceremony.

a. Thank you to Global Compact Network Singapore for organising this event.

b. And my congratulations to all nominees for being leaders in corporate sustainability and demonstrating excellence in embodying the Ten Principles of the United Nations Global Compact.

2.            COVID-19 has changed our world. 

All of us – be it governments, businesses, or individuals – have had to adapt to sudden and drastic changes.

a. It has certainly been a challenging time for everyone.

b. And there are still uncertainties ahead. We are reminded with Omicron that the pandemic is not over. And remember, there are still many more letters in the Greek alphabet. Omicron will not be the last barrier we have to face. The good news is that vaccines and boosters do work. Some of the early reports and indications are that the boosters do work well against Omicron and, I'm quite sure, will continue to work well against the new variants. So for Singapore at least, with our very high vaccination rate and with boosters being made available to everyone, we should be able to get through this pandemic with minimum casualties.

c. And at some point, the pandemic will end. SARS, COVID too, will become yet another coronavirus that exists with humankind, and we will learn to live with the virus.

3.            So even as we continue to deal with COVID-19, we must also plan now to emerge stronger in a post-pandemic future. And that's why the Sustainability Development Goals remain so important.

a. And amongst all of the different areas of sustainability, one major issue we will have to deal with is climate change.

b. It is an existential crisis for the entire world,

c. And even more so for Singapore, because we are a low-lying city-state.

4.            Governments can build a strong foundation for sustainability efforts in their respective countries.

a. But this alone will not move the needle unless there is strong cooperation from businesses.

b. So, it is crucial that governments and businesses work together to speed up the transition to a more sustainable future.

5.            Because as all of us know, massive changes are required to move towards a greener future.

a. Some have estimated that the world needs to invest around US$150 trillion over the next 30 years to rein in carbon emissions and switch to more sustainable energy sources.

b. To put things in perspective, that is about nearly twice the world’s current GDP – it took several hundred years for the world economy to get to its current size; and we now have this task of building a new green economy, twice the size of what we have today, and at a much shorter timeframe of about 30 years.

c. So, there is great urgency to act; and we can move faster if everyone plays their part.

Working Together

6.            The Government will set the overall framework to decarbonise the economy. In Singapore, what are some of the things that the Government will do?

7.            First, we will put in place regulations and policies to strive to reduce the amount of carbon emissions in Singapore.

a. We aim to progressively reduce the absolute amount of carbon emissions released into our atmosphere.

b. And we will do so starting with the right carbon price. This is necessary to internalise the cost of carbon, and bring about a reduction in carbon footprint. So I mentioned before, we are reviewing the carbon tax and we will be updating it at the Budget next year. But a carbon price alone is not going to be enough.

c. We also need stricter standards, include standards for equipment appliances or even for motor vehicles. So for example, as we have already announced to phase out internal combustion engine vehicles and have all vehicles running on cleaner energy by 2040.

d. Carbon price and regulatory standards -- these are the two big levers that the Government can use, not just in Singapore, but everywhere around the world to progressively decarbonise the economy.

8.            Second, the Government is committed to supporting businesses like yours in making the shift towards more sustainable practices.

a. The transition will certainly require efforts, but we have in place programmes and schemes to help ease the transition.

b. For example, we have set up the Enterprise Sustainability Programme announced recently to support Singapore businesses on sustainability initiatives, and to capture opportunities in the green economy.

c. And we expect to reach out to more than 6,000 enterprises over the next four years through this programme.

9.            Third, we will develop a robust financing eco-system to support the green transition.

10.          Green efforts will need capital. And the Government here again, will take the lead in developing a robust green finance market by laying out the framework and rules, testing these out with Government issuances for a start, and exploring ways to connect with different stakeholders.

a. For example, the National Environment Agency will be establishing a $3 billion Multicurrency Medium Term Note Programme and the Green Bond Framework, to finance sustainable infrastructure projects, like this Integrated Waste Management Facility in Tuas.

b. MOF, my Ministry, has also set up a Green Bonds Programme Office to catalyse the Government’s green financing options. 

11.          All of these efforts will help to grow the supply and demand for green investments, and create a strong eco-system for sustainable financing and investing.

12.          Besides green financing, we also need a market for voluntary carbon credits.

a. Because some companies may face difficulties eliminating emissions completely or quickly.

b. And a way to offset the residual emissions is through the purchase of carbon credits.

c. This can also help to channel private financing toward climate-related projects that may otherwise not take off.

13.          The Government is working to develop the carbon credit market in Singapore, and position Singapore as a hub for carbon management services.

a. In many ways, we believe we are well-positioned to serve as a carbon services and trading hub for Southeast Asia and the Asia Pacific, given our foundation as a regional centre for professional services, commodity trading and financial services.

b. Today, Singapore is home to more than 70 carbon services and trading firms that already use us as a base to serve the region and engage in carbon market activities.

c. We will continue to support these companies and more that are interested to be a part of our carbon services and trading ecosystem.

Criticality of Businesses in Sustainability Efforts

14.          I have described the actions that the Government is taking, in particular what we are doing in Singapore.  At the same time, businesses, all of you, will have to do your part too.

a. Individual firms may feel like they may not be able to make much of an impact by themselves.

b. But collectively, businesses have enormous reach to your customers, and the ability to drive sustainability efforts across your supply chains.

15.          When you speak to businesses, sometimes you get some misperceptions on this issue.

a. For example, some firms will tell me, reducing emissions is probably just for the big oil and gas companies, because they are the ones, they are the biggest culprits, so we should go after them first.

                                          i.    But in fact, the oil majors are already moving. For example, Shell has announced its commitment to be a net zero energy business by 2050.

                                         ii.    It is not just the oil majors. It is not just the energy sector. It is not just the chemical sector, or the petrochemical sector. Businesses across the rest of the economy also need to do their part.

b. Others, particularly the services companies, say, “Well, look, I’m not in manufacturing; I’m not in heavy industry. I’m in professional services, so my carbon footprint is really not that large.”

                                          i.    Yes, that may be so, but don’t just look at your direct emissions or the emissions from the electricity that you consume, which is Scope 1 and 2 emissions. If you don’t know what they are, get on the programme.

                                         ii.    But consider the indirect emissions that occur across your company’s supply or value chain too, which is the Scope 3 emissions. That is also an important part of your carbon footprint and you can do your part to reduce Scope 1, Scope 2 and Scope 3 emissions.

16.          In fact, going green is not just something that’s good-to-have for businesses; increasingly, it will become an integral part of your operations.

a. Investors and customers are already placing more and more emphasis on environmental sustainability.

b. So businesses that proactively make this transition to green practices will be in a better position to thrive in the coming years.

c. Because the future will be a green future. And if you are not there, if you are not making the effort to get there, you will be lagging behind. So those that fail to start early and proactively put in place processes to make this green transition will risk falling behind.

d. And that is why all companies have to start asking themselves critical questions:

• What is your carbon footprint today?

• Do you have a plan to reduce your emissions over the coming decade and beyond? 

• Do you have a plan to get to net zero as soon as possible? 

17.          You need answers to these questions. If you have not already started thinking about them. An example of a company that has embedded sustainability within its corporate strategy is Unilever.

a. Unilever’s Climate Transition Action Plan aims to achieve net zero emissions targets across its value chain by 2039 and it is doing so through strategies like ending deforestation linked to key commodity crops, and integrating emissions reduction goals into innovation plans for its brand and product development.

b. It puts up this plan for shareholders to vote earlier this year. It is the first time a company of this size has done so and the result was that an overwhelming majority of shareholders voted in favour of their net zero plan.

c. It illustrates the growing shareholder and investor focus on sustainability, and in particular, on environmental sustainability.

18.          Unilever’s example shows that change is possible if business leaders step up and lead the way.

a. The transition is not going to be easy, we understand that, but there are resources to help businesses navigate this journey. 

b. Climate Governance Singapore, the local chapter of the global Climate Governance Initiative, was launched recently. 

c.  It will partner with the Singapore Institute of Directors and the Singapore Management University to provide useful resources to help board members play an informed role in boardroom discussions and make decisions on the risks and opportunities associated with climate change.

19.          Besides business strategy, leaders should also foster a culture of sustainability within their respective organisations. 

20.          One example is Matex Holdings. This is a home-grown world leader in providing colours, specialty chemicals and cleaning solutions to sectors like textile, paper, and leather.

a. The company fosters a culture of sustainability by tying their employee KPIs to sustainable proposals or actions that they can come up with.

b. And these ideas or actions can range from upcycling and recycling, to choosing to partner social organisations and welfare groups, and coming up with sustainable viable products, solutions and services.

c. By doing so, the company drives all their employees to think sustainability first, and find meaning and value in their decisions and actions.

21.          Both Matex and Unilever are winners from previous year’s edition of the Singapore Apex Corporate Sustainability Awards.

a. They will soon be joined by this year’s award recipients sitting amongst you. I don't know who they are. I asked, but I was told I cannot announce ahead of time; otherwise, it will not be fair. So amongst you are potentially winners of this year's awards.

b. And I want to thank you and your companies for stepping up and sustainably co-exist.

c. So tonight’s awards ceremony is an excellent platform to showcase your efforts; And I hope your efforts will inspire many more businesses in Singapore to do the same. So once again, congratulations in advance to all the award recipients.

Conclusion

22.          To conclude, the COVID-19 pandemic has shown us how fragile and yet resilient the world can be when faced with a crisis.

a. We are fragile, because no country, no matter how big or small, rich or poor, was spared when COVID-19 hit.

b. At the same time, we are resilient, because despite the uncertainty, we have been able to adapt and adjust quickly.

c. Just think about this. At the start of the pandemic, if you recall in early 2020, very few people, no one in fact, believed that we could develop a safe and effective vaccine for the world in time.

d. But that is not surprising because if we look at the historical record until COVID-19, the record for developing a vaccine was for mumps – and that took four years; most vaccines take a decade to develop.

e. We have been spoiled, you know, we got a vaccine in super quick time through human ingenuity and innovation, and we have developed not just one, but several vaccines to fight the virus. So against any historical metric and measure, this is in fact an incredible success for humanity.

23.          The bottom line is that our response to the pandemic crisis gives us reason to be hopeful for the future.

a. Indeed, in the face of climate change, we will continue to face the perils of fragility. There will be many areas of concern and challenges.

b. But with determination, innovation and resilience, we can get off the path of climate distress and onto a healthier path for humanity.

c. And in Singapore, the Government is committed to walking this journey with all of you, with all our businesses and stakeholders, to forge a more sustainable economy and a greener future for Singapore. Thank you.