Speech by Mr Chee Hong Tat, Minister for Transport and Second Minister for Finance, at the UN Global Compact Network Singapore Summit 2024

President of UN Global Compact Network Singapore Dr Bicky Bhangu,

Your Excellencies,

Ladies and Gentlemen

Introduction

1.   Thank you for inviting me to speak today at the 16th UN Global Compact Network Singapore Summit. I want to start off by saying that the theme of “Forward Faster” is something that my team and I in the One Transport family were very focused on over the past week as we were working to resume MRT services on the East-West Line as soon as we can, while ensuring safety of workers and safety of commuters. So, I want to start my speech by thanking our workers for their hard work, for working day and night on the repair works of providing the bridging services and helping our commuters to complete their journeys. I want to say a big thank you to all our workers.

2.   The world is facing more extreme weather events that threaten food and water security, human health, and economies. 

a.   To protect lives and livelihoods from the effects of climate change, we need global solutions.

b.   Preparing for climate change is an existential issue for Singapore, which we need to start now to be ready for the future. We are committed to investing in new capabilities and moving forward with international climate actions, while maintaining our economic competitiveness.

3.   Singapore has set a goal to achieve net-zero emissions by 2050. More than 140 countries have made or are considering similar commitments. This offers opportunities for our companies to grow and create good jobs for our people.

a.   At the same time, it also introduces new challenges. 

b.   That is why we must ensure our businesses are prepared for a low-carbon future.

4.   Please allow me to outline three key areas to unlock positive outcomes in the global green transition.

Leveraging Technology 

5.   First, leveraging clean technology. Clean technology has become a key driver of transformation, as Singapore, together with the rest of Asia and the world, seeks ways to decarbonise the way we manufacture products, the way we generate power, the way we construct buildings, the way we move and propel our cars, our ships and our airplanes. 

a.   This has opened up vast business opportunities in the development of green and transition technologies, including new funding and markets. 

6.   The Government is committed to supporting our businesses to innovate, commercialise and scale their solutions to tap on these opportunities.

a.   The Enterprise Financing Scheme–Green (EFS–Green), for instance, supports local enterprises in accessing green financing.

b.   Local start-up KoolLogix is one such firm that tapped on EFS-Green to test its novel heat removal solution for data centres, which helps customers reduce emissions and achieve substantial cost savings. This is one example where it is good for business, and it is also good for the environment.

7.   Businesses that adopt sustainable technologies, such as energy-efficient equipment and carbon accounting software, reap more than just environmental benefits. They can reduce their costs and also sharpen their competitive edge. Importantly, I think this is also something that customers are looking for when they assess which product, which service to purchase.

a.   Let me give you another example. City Developments Ltd (CDL) saved over $38 million between 2012 and 2022 from energy-efficient retrofitting and initiatives across its commercial buildings¹.

b.   As I mentioned earlier, these are not just expenditure. These are investments to help companies to be able to save money, save costs, and to reduce their carbon emissions.

8.   And it is not just the big players who stand to benefit. A new survey by the Singapore Business Federation (SBF) and Bain, which is going to be released today, found that SMEs further along in their decarbonisation journeys are 1.5 to 2 times more likely to realise benefits, from achieving cost savings to attracting new customers.

a.   One example is People Bee Hoon Factory, an SME. They saw electricity cost savings of about 30% from the installation of solar panels.

9.   But not everything is rosy. Only one-third of SMEs have made significant decarbonisation progress, compared to 80% of larger firms. So we do have some challenges to overcome. We have put in place a suite of support measures for our businesses to adopt green solutions, including the enhanced Energy Efficiency Grant and expanded EFS–Green scheme.

a.   As part of enhancing and streamlining the application process, we had folded the Energy Efficiency Fund under the Energy Efficiency Grant (EEG) and are working to centralise EEG applications on the Business Grants Portal.

b.   I would like to encourage our SMEs who are keen on these energy-saving and sustainability solutions to come forward and tap on the support available to help to speed up your green transition. 

10.   We know new technology can also include things like Artificial Intelligence (AI), because this can be a powerful enabler to unlock the benefits of decarbonisation and tackle challenges in areas like manpower and cost.

a.   In a sectoral net zero transition programme for food manufacturing SMEs piloted by SBF and Bain, with support from Enterprise Singapore and the Singapore Food Manufacturers’ Association, participants co-created an AI-powered tool, which automates tasks typically handled by a Chief Sustainability Officer (CSO). Using this tool, SMEs can make decarbonisation plans tailored to their company needs, 75% more efficiently than traditional manual processes. We understand that SMEs do not have the resources to individually hire their own Chief Sustainability Officers. But through this tool, we are able to help them achieve, to a large extent, the benefits, but without necessarily incurring the cost.

b.   I am heartened to hear of the pilot’s success, and we are now going to expand this to support more SMEs in food manufacturing, and later on to scale up to other sectors, with the eventual goal to expand to more than 1,000 SMEs in Singapore over the next five years.

Developing Talent 

11.   Next, developing talent. To capture green growth opportunities, businesses can tap on Singapore’s growing pool of green talent and take steps to integrate green skills into roles that are not traditionally green.

a.   The Government will continue working with businesses and training providers to equip workers with in-demand skills in sustainability and develop a pipeline of talent to support our growing green economy.

12.   Last year, we set up the Green Skills Committee with industry players and training providers, to ensure that our workforce develops green skills in line with industry needs, starting with energy and sustainability reporting.

13.   Businesses — particularly SMEs — can also tap on the SkillsFuture Enterprise Credit to build in-house capabilities in sustainability.

14.   Besides providing broad-based support, we are also implementing sector-specific training initiatives. To meet the growing regional demand for sustainable financing, Monetary Authority of Singapore (MAS) has set aside S$35 million in the Financial Sector Development Fund to support upskilling and reskilling and develop specialists in sustainable finance over the next three years. This includes: 

a.   Expanding the suite of sustainable finance courses, and 

b.   Implementing an Institute of Banking & Finance (IBF) Skills Badge that can be used to recognise workers who acquire sustainable finance skills.

15.   To support the decarbonisation efforts of the maritime sector, the Maritime and Port Authority of Singapore (MPA) set up the Maritime Energy Training Facility earlier this year to train workers to handle and operate ships that run on alternative fuels.

a.   More recently, MPA and key industry partners signed an MoU to raise capabilities in carbon accounting and management among local maritime companies. We are also doing trials with new cleaner fuels like ammonia and methanol.

16.   I am happy that many of our young people are already building green knowledge and skills, and thinking of ways to integrate the sustainable development goals into business solutions.

a.   I look forward to present the Young Sustainable Development Goals Leaders Awards later, to some of these exemplary youths.

Balancing Trade-offs

17.   Third, balancing trade-offs. In the long run, a prosperous global economy must be an environmentally sustainable one. 

18.   But while there may be initiatives that reduce both emissions and costs, there are also real trade-offs to consider as we pursue our sustainability goals amidst intense global competition.

a.   Take for example the use of Sustainable Aviation Fuel (SAF). Its use is critical to Singapore’s goal of net zero by 2050, but it currently costs about 3 to 5 times more than conventional jet fuel – not just for Singapore, but for global international aviation. To avoid very high costs from affecting air travel, which will then be passed through to passengers, to airlines, and this will hurt our air hub and economy, we must balance ambition with practicality. 

b.   We have therefore adopted a calibrated approach to balance sustainability and competitiveness, to support the long-term growth of our air hub. We have set an initial target of 1% SAF uplift in 2026. Our goal is to gradually raise the target to between 3 – 5% by 2030, subject to global developments and the wider availability and adoption of SAF. I am quite encouraged that at the ICAO meeting in New Delhi several weeks ago, we saw some good progress on this, with more countries coming forward to commit to their SAF targets. I hope this will give SAF producers the confidence to invest in new production facilities, in order to increase the global supply of SAF.

19.   We must ensure our businesses are resilient and can compete and thrive as we move in tandem with global developments in sustainability.

20.   Consider, for instance, how investors, consumers, financiers and other companies are increasingly factoring climate risks and environmental impact into their decisions. 

a.   A global study by Standard Chartered found that 78% of multinationals planned to remove suppliers that could endanger their carbon transition plans by 2025². So if you are not ready, you may find yourself having fewer options.

b.   Businesses that are able to build strong climate reporting capabilities stand to unlock new markets, customers, and financing options.

21.   We recognise that reporting comes with costs, and that some businesses are more ready to start than others. We are committed to supporting our businesses – from large firms to SMEs –to help them to smoothen their sustainability performance reporting journeys, and ensuring they have a level playing field to compete internationally.

a.   The Sustainability Reporting Grant will provide funding support for large companies with annual revenue of $100 million and above to produce their first sustainability report in Singapore.

b.   We understand that SMEs may be more cost-sensitive and face unique challenges. While reporting is currently not mandatory for SMEs, we are committed to supporting our SMEs in developing a competitive edge and to be early adopters if they are able to do so.

c.   The Government will launch the SME Sustainability Reporting Support Programme later this year to help defray costs for SMEs preparing their first sustainability reports.

d.   Last year, MAS also launched Gprnt, an integrated digital platform that simplifies how businesses collect, access and act upon ESG data to support their sustainability initiatives. I believe that this will also be useful for our SMEs.

22.   On the regional level in Asia, the importance of balancing sustainability goals and growth is something that will continue to be a key issue because we can expect industrialisation, urbanisation and rising affluence to drive demand for energy. We are thus mobilising financing for green and transition activities, such as via blended finance initiatives like Financing Asia's Transition Partnership (FAST-P).

Conclusion

23.   Planet and profit are not mutually exclusive. The key is to align these goals and it lies in our ability to harness technology and talent, and pursue green growth in a sustainable manner by always keeping a sharp focus on the trade-offs and our economic competitiveness. I believe this is a holistic, more balanced way and more sustainable way to get all stakeholders including our companies, workers, consumers to support this transition.

24.   Let us make sustainability our competitive advantage to build a more prosperous and resilient future for generations to come.

25.   Thank you. 

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[1] https://www.cdl.com.sg/newsroom/cdl-first-in-southeast-asia-to-apply-two-pillar-esg-disclosure-framework-in-its-16th-integrated-sustainability-report-zeros-in-on-positive-impact-and-value
[2] https://www.sc.com/en/press-release/carbon-dated-multinational-companies-planning-to-cut-suppliers-by-2025-for-failing-to-curb-carbon-emissions/