Speech by Ms Grace Fu, Minister for Sustainability and the Environment, at the Human Capital Leadership Insitute (HCLI)’s Singapore Business Leaders Programme (SBLP), on 24 November 2020
Mr Sunny George Verghese
Chairman of Human Capital Leadership Institute
Ladies and Gentlemen
A very good morning to everyone. I am glad for this opportunity to meet all of you today.
Emerging Stronger from COVID-19
2 The COVID-19 pandemic has triggered the sharpest contraction in the global economy since the Great Depression and is a vivid reminder that we live in a deeply interconnected world. It has reminded us how vulnerable we are to the forces of nature and underscored the importance of collective action to overcome global challenges.
3 In addition to battling the pandemic, we are now at a critical juncture in our fight against climate change. The United Nations Intergovernmental Panel on Climate Change has projected that to keep the rise in global temperatures below 1.5 degree Celsius this century, carbon emissions would have to be cut by 45 per cent by 2030 so as to avoid some of the most devastating outcomes. Even as we respond to the immediate challenges posed by COVID-19, we must seize the opportunity to put sustainability at the core of our recovery plans and policies, and change the way we produce and consume.
Towards a green recovery
4 Today, I would like to share three key areas of work we are focused on as we chart our way towards a green recovery: (i) building resilience through a circular economy; (ii) supporting the low-carbon transition and seizing green growth opportunities; and (iii) leveraging green finance. Let me elaborate.
5 First, circular economy. The ethos of sustainability and a circular economy approach are not new to Singapore. Since our independence, we have inherently understood that as a small nation with limited natural resources, we must develop sustainably. We recognised early the need to conserve our limited resources and keep them in use for as long as possible. Our water story is a well-known example of how we have done this successfully. We continue to look for synergies within and across resource loops, which allows us to maximise resource use and efficiency, minimise waste, and create economic opportunities.
6 By 2025, we will complete the construction of Tuas Nexus, which integrates a water reclamation plant with an Integrated Waste Management Facility (IWMF). At Tuas Nexus, food waste will be mixed with used water sludge and co-digested, increasing biogas production by 40 per cent. This in turn enhances the thermal efficiency and will boost electricity generation of the IWMF. The plant will generate sufficient electricity to power Tuas Nexus, with excess to be exported to the grid. This excess electricity will be able to power up to 300,000 four-room HDB flats. The synergies at Tuas Nexus will reduce an estimated 200,000 tonnes of carbon emissions a year, equivalent to taking 42,500 cars off the road.
7 Second, Singapore has been positioning ourselves to seize business opportunities in the green economy and supporting companies to develop new capabilities, products and services. According to the Global Commission on the Economy and Climate1, bold climate action could generate more than 65 million new low-carbon jobs globally in 2030.
8 As Singapore pursues sustainable development, we expect 55,000 new and upgraded jobs to be created within the next 10 years. As we look to strengthen food security in the face of climate change, we will create skilled jobs in the agri-tech industry. We will also help cleaning and waste management professionals enhance their skillsets and take on more specialised roles in recycling or waste treatment. We have been working on leveraging technology to recover resources from waste – such as NEWOil from discarded plastics – and are developing our recycling industry, including a pilot plant that will help anchor the chemical recycling value chain here in the next few years. We will continue to welcome global companies which are keen to use Singapore as a base for innovation and collaboration to develop and commercialise sustainable solutions for Asia.
9 Third, green finance is a critical enabler of green growth. As a champion of sustainable development and an international financial centre in the heart of Asia, Singapore is well-placed to support Asia’s sustainability journey through green finance. The Monetary Authority of Singapore (or MAS) has developed a Green Finance Action Plan to strengthen the financial sector’s resilience to environmental risks and develop green finance solutions and markets. Notably, MAS has set up a US$2 billion green investments programme to invest in public market investment strategies that have a strong green focus. This will help to promote environmentally sustainable projects and mitigate climate change risks in Singapore and the region.
Key Roles of Companies and Business Leaders
10 With the world facing an increasingly carbon and resource-constrained future, being sustainable is a fundamental necessity for business organisations and nations to thrive. In addition to regulations and initiatives from the Government, the daily decisions by companies and business leaders such as yourselves will be critical determinants of our success in making a green transition.
11 By striving for energy efficiency and setting ambitious targets for carbon emissions, companies can catalyse multiplier effects within their industries and downstream businesses. Companies can also embed a circular approach in business processes by repurposing waste or by-products as a resource or raw material for production. A sustainable approach is not only good for the environment but also the bottomline – there can be significant cost savings over the long term, with using less energy, disposing of less waste, and acquiring less raw materials.
12 There is growing consumer scrutiny over the environmental priorities of companies and their global carbon footprint. Studies have shown that millennials desire to invest in companies with good Environmental, Social and Corporate Governance (or ESG) track records2. With the opportunities brought by green growth and the increasing demands of consumers for corporate commitments to sustainability, the adoption of sustainable business practices is part of what will make companies future-ready.
Environmental and Social Responsibilities are Intertwined
13 Finally, I would like to highlight how environmental and social responsibilities are intertwined. As this COVID-19 pandemic has demonstrated, the poorest communities are often the most vulnerable and this includes climate change. According to research from Stanford University, climate change has worsened global economic inequality. Specifically, the gap between the economic output of the world’s richest and poorest countries is 25 per cent larger today than it would have been without global warming. From 1961 to 2010, global warming decreased the wealth per person in the world’s poorest countries by 17 to 30 per cent. Beyond the comparisons between countries, there is growing consensus that within countries, lower socioeconomic groups suffer disproportionately from the adverse impacts of climate change and environmental degradation, resulting in greater subsequent inequality.
14 Inclusive growth is an integral part of the sustainability agenda. The United Nations has listed “Reduced Inequalities” as one of the 17 Sustainable Development Goals. Even as we mitigate and adapt to the effects of climate change, it is important to work on narrowing the income inequality gap, improving reliable access to information, and enhancing connectivity of disadvantaged groups. Companies can lead the way here as well, by ensuring fair employment practices, advocating social responsibility, and embracing community rights as a fundamental priority. By fully integrating these into their daily business operations, companies can catalyse industry-wide norms that motivate collective action.
15 The decisions we make today on our post-COVID recovery will determine if we can emerge stronger and be better placed to transition to a sustainable and climate-resilient future. I urge all present today to consider how your companies can place sustainability at your core and build a better future for all.
1 New Climate Economy 2018 Report. Accessed at https://newclimateeconomy.report/2018/executive-summary/ on 12 Nov 2020.
2 Royal Bank of Canada Wealth Management and The Economist Intelligence Unit, 2019, Motivated by more than money: Younger high-net-worth investors in Asia increasingly prioritise ethical investing; Ernst and Young, Sustainable Investing: The Millennial Investor. Referenced on 12 Nov 2020 from https://www.mas.gov.sg/news/speeches/2020/harnessing-the-power-of-finance-for-a-sustainable-future#10