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SINGAPORE - The current global energy crisis is a wake-up call for businesses to become greener, with those which delay 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 Russian-Ukraine war, has led several European countries to light up or consider restarting their coal plants to meet their energy needs, marking a temporary setback to the global transition away from fossil fuels.

Mr Teo was addressing over 300 representatives from organisations including multinational corporations, small and medium-sized enterprises and trade associations at Orchard Hotel.

This is the 14th edition of the one-day summit, organised by the Singapore chapter of the United Nations Global Compact. It brings together business leaders to discuss the latest corporate sustainability trends and ways to meet the UN’s sustainable development goals.

“First movers will capture upsides, while those who are slow to act will lose out to their competitors and may be written off as doing too little, too late,” said Mr Teo.

Singapore is one of more than 70 countries that have targeted to hit net-zero carbon emissions around 2050 or earlier in order to keep global temperatures from exceeding 1.5 deg C above pre-industrial levels. This 1.5 deg C cap will limit the risk of more extreme and intense weather conditions associated with climate change.

To thrive in a low-carbon world, businesses can act on three key areas: decarbonisation, sustainable supply chain management, and investment into research and development of sustainable innovation, said Mr Teo.

First, businesses need to 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 progressively raise its carbon tax from the current $5 per tonne to $50 to $80 by 2030. The Republic is the first country in South-east Asia to implement such a tax, which taxes companies for the emission of carbon dioxide.

Apart from aspiring to position Singapore as a carbon services and trading hub, the Government is also discussing high-quality carbon credits with countries like Ghana and Colombia to advance global climate action and decarbonisation goals, he added.

 
Second, businesses will have to adapt to climate policies, technological advancements and stakeholder preferences which could disrupt their operations and supply chains, said Mr Teo.

For example, renewable fuel company Neste has a production and circular solutions regional hub in Singapore, whose operations include producing sustainable aviation fuel by blending used cooking oil and waste animal fat with refined jet fuel. The circular economy aims to maximise the life cycle of all products.

Lastly, businesses should invest in research and development of sustainable innovation, said Mr Teo. He cited the example of local company Red Dot Analytics, which leverages artificial intelligence-based green technologies developed by Nanyang Technological University to optimise its data centre 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, to make them technologically and economically viable even earlier.

Through funding opportunities, such as the $55 million Low-carbon Energy Research Funding Initiative, Singapore aims to lower the cost barrier to entry for such companies, the minister added.

Responding to a question from the audience on the risks that businesses face if they did not green their operations, Mr Teo said: “I think the greater risk for companies.... is actually to be caught on the wrong side of the climate change discussion, and to have businesses struggle with products that are unsellable.”

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 environment sustainability Lee Hui Mien, who discussed steps businesses can take to decarbonise their operations amid a growing appetite for sustainable business.

One emerging area that needs to grow is recycling, with less than 10 per cent of plastics being recycled here, which means a lot of virgin plastics are still being used in Singapore, said Mr Lim. He added that building an ecosystem will encourage recycling here.

Dr Lee said that Singtel customers are demanding the company look at how green its network is and whether it can deliver better connectivity at lower carbon emissions.