Sustainability in Singapore: How the pandemic has shaped the way government and businesses value sustainability
  • Opinion
  • 22 April 2021

Sustainability in Singapore: How the pandemic has shaped the way government and businesses value sustainability

Ever since climate change caused by greenhouse emissions was first observed by scientists in the 19th century, the move to both recognize and work to lower the impact of climate change has been slow burning. But with the advent of a global pandemic grinding entire economies to a halt, the crisis was a clear signal to both government and private entities to reflect and refocus their climate change plans.

As part of their pivot to ensure Singapore remains an evergreen Garden City, the Singapore Government announced the Singapore Green Plan 2030 framework in February earlier this year.

Focusing on renewing their push on key green technologies, some key targets include:
– Preventing new diesel cars and taxi from registering in Singapore from 2025 onwards
– Reducing overall emissions from current and new buildings to 60% of current levels
– Turning Sentosa into a carbon-neutral destination by 2030
– 130 hectares of new parks over the next six years
– Strengthening the Singapore costal defenses to guard against the rising sea levels.
– Reducing the country’s carbon emission intensity by 36% from 2005 levels by 2030

Noting that it will require a whole-of-nation effort, similar in scale to the efforts against the COVID-19 pandemic, the task is monumental for Singapore.

But in some areas, the island nation is already ahead of the curve in implementing green initiatives.

Now home to one of the world’s largest floating solar farms, Singapore now possesses the power to generate an estimated 6 million kilowatt hours of energy per year through the power of the sun –  potentially offsetting more than 4,000 tonnes of carbon dioxide per year, or the equivalent to the greenhouse gas emissions of 900 passenger vehicles a year. This innovative use of Singapore’s precious land and key technologies will be the defining features of the government’s effort to cut down reliance on fossil fuels.

In the private sector, both financial and real estate giants have thrown their lot in with the government’s effort to go green. Focusing on the principles of environmental, social and corporate governance (ESG), both sectors have started pushing more ESG-focused portfolios and offerings. Even the world’s largest hedge fund, BlackRock (with assets valued as US$8.67 trillion), has announced that ESG will be a core goal of their portfolios for future investment decisions.

In fact, despite the economic upheaval brought about by the pandemic, sustainability funds consistently outperformed the market average in 2020 both in developed and emerging markets. Financial literature increasingly suggest that sustainability translates to resilience against external shocks, such as a global pandemic.

In a review of over 200 studies related to sustainability practices, Arabesque and the University of Oxford in 2016 found out that companies with good sustainability practices tend to have better operational performance and a lower cost of capital, allowing them to weather unexcepted events.

In 2020, sustainable funds have seen a record inflow, including in Asia, which illustrates investor’s increasing interest for sustainable portfolios.

It increasingly looks like it is just a smart move for money to go green.

In real estate, EDMUND TIE’s CEO, Ms Ong Choon Fah, has noted similar sentiments from retail investors in the Singapore property market. While retail investors may not be overtly looking for the label of sustainable developments, buyers are  however interested in the benefits arising from sustainable developments such as proximity to greenery and public transport. Without realizing it themselves, retail investors are trending towards sustainable developments and motivating developers to include more green features with their developments.

For retail properties, more owners and developers are being encouraged to go green. As both public and private sentiments shift towards sustainable properties, developers are encouraged, by both public and private subsidies, to improve their holdings. For example, one of Singapore’s landmark heartland malls, NEX at Serangoon, has recently acquired a maiden green loan of S$900 million from DBS, OCBC and UOB. The green loan was approved after the mall managed to improve its Building and Construction Authority (BCA) certificate for sustainable properties. Obtaining the gold standard after enhancing its recycling programme to include e-waste and optimizing its chiller plant room, the mall’s owner GOLD Ridge was able to bag its maiden green loan.

Such rare partnerships may become commonplace in the future as more sectors unite in pushing for a greener and more sustainable future.

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