SINGAPORE – The current global energy crisis is a call for businesses to become greener, with those delaying action doing so at their own peril, said Senior Minister and Coordinating Minister for National Security Teo Chee Hean at the 2022 Global Compact Network Singapore Summit on Monday.
The global energy crisis, exacerbated by the Russia-Ukraine war, has led some European countries to light up or consider restarting their coal plants to meet their energy needs, marking in a temporary failure of the global transition from fossil fuels.
Mr Teo addressed over 300 representatives from organizations including multinational corporations, small and medium enterprises and trade associations at the Orchard Hotel.
This is the 14th edition of the one-day summit, organized by the Singapore chapter of the United Nations (UN) Global Compact. It brings together business leaders to discuss the latest trends in corporate sustainability and ways to achieve the UN’s sustainable development goals.
“First movers get upsides, while those who are slow to move lose out to their competitors and can be written off as too little, too late,” said Mr Teo.
Singapore is one of more than 70 countries that have committed to net-zero carbon emissions by 2050 or earlier to keep global temperatures above 1.5 deg C above pre-industrial levels. This 1.5 deg C cap will limit the risk of more severe and extreme weather conditions associated with climate change.
To thrive in a low-carbon world, businesses can act in three key areas – decarbonization, sustainable supply chain management, and investment in research and development of sustainable innovation, said Mr. Teo.
First, businesses must decarbonise to remain competitive in a low-carbon future, he said, adding that oil giants, including Shell and ExxonMobil, have already pledged to reduce carbon emissions.
He cited Singapore’s plans to gradually raise its carbon tax from the current $5 per ton to $50 to $80 by 2030. The Republic is the first country in Southeast Asia to implement such a tax, which taxes companies for carbon dioxide emissions.
Besides seeking to position Singapore as a carbon services and trading hub, the Government is also discussing high-quality carbon credits with countries such as Ghana and Colombia to advance global climate action and decarbonization goals, added he.
Second, businesses must adapt to climate policies, technological advances and stakeholder preferences that may disrupt their operations and supply chains, said Mr Teo.
For example, the renewable fuel company Neste has a production and circular solutions regional hub in Singapore, whose operations include producing sustainable aviation fuel by blending used oil and waste animal fat with refined jet fuel. The circular economy aims to maximize the lifecycle of all products.
Finally, businesses should invest in research and development of sustainable innovation, said Mr Teo. He cited the example of local company Red Dot Analytics, which uses artificial intelligence based on green technology developed by Nanyang Technological University to optimize data center operations and improve their energy efficiency.
He said that Singapore is a good living laboratory and test bed for companies to develop new technologies and solutions, so that it can be technologically and economically feasible even earlier.
Through funding opportunities, such as the $55 million Low-carbon Energy Research Funding Initiative, Singapore aims to lower the cost barrier for such companies to enter, the minister added.
Responding to a question from the audience about the risks businesses will face if they do not continue their operations, Mr Teo said: “I think the bigger risk for companies . .. to actually get caught on the wrong side of the climate change debate, and for businesses to struggle with products that don’t sell.”
Other speakers at the summit included local bank UOB’s chief sustainability officer and head of group finance Eric Lim and telecommunications firm Singtel’s senior director for group environmental sustainability Lee Hui Mien who discussed the measures that businesses can do to decarbonize their operations amid the growing appetite for sustainable business.
One emerging area that needs to grow is recycling, with less than 10 percent of plastics being recycled here, which means a lot of virgin plastic is still being used in Singapore, said Mr Lim. . He added that building an ecosystem will encourage recycling here.
Dr Lee said Singtel customers are asking the company to look at how green its network is and whether it can provide better connectivity with lower carbon emissions.
