How Sustainability Can Help Companies To Stay Relevant And Capture Opportunities
The sustainability movement is gaining momentum globally, with growing awareness and calls to act on environmental and social challenges. This has resulted in active steps being taken by various stakeholders to address these issues.
In line with this, we see an increasing demand by customers for more sustainable products and services. Some enterprises have also begun to take steps to incorporate sustainability in their businesses, choosing sustainably sourced raw materials or adopting the relevant sustainability related standards. Governments too have stepped up efforts to drive sustainability with many from key economies committing to ambitious carbon reduction targets to address urgent issues on climate change.
Singapore is similarly advancing our efforts in sustainable development, with the launch of the Singapore Green Plan 2030 last year. Decarbonisation is a major theme, and includes efforts such as increasing solar deployment, deploying electric vehicle infrastructure, improving energy efficiency of buildings, and piloting the use of lower-carbon alternative fuels in our aviation and maritime sectors. Several government initiatives have also been announced to drive environmental sustainability efforts among enterprises, including an increase in the carbon tax to accelerate decarbonisation efforts, and the implementation of a mandatory packaging reporting requirement as the first step to reduce packaging waste.
However, we are still at the beginning of our sustainability journey. Awareness of the concept of sustainability is low among enterprises and many are unsure of its relevance to their businesses, while others lack knowledge on how to start. Business owners are also understandably cautious and worried about the costs of pursuing sustainability.
Sustainability developments and opportunities
With increasing demand for sustainable practices, products and services, it is merely a matter of time before sustainability becomes more than a nice to have for enterprises to do business.
Key business stakeholders are already placing more emphasis on sustainability. Apart from having to adhere to new sustainability policies and regulations imposed by governments in Singapore and overseas, enterprises will need to step up on Environment, Social and Governance (ESG) factors when seeking investments and loans as financiers and investors take steps to green their portfolios. More multinational corporations are also taking steps to improve sustainability in their supply chains and require suppliers to meet sustainability standards or achieve sustainability outcomes. We also see employees increasingly preferring to work with businesses that have embedded sustainability values, requiring enterprises to do more to attract talent.
So what benefits does sustainability bring to enterprises?
For a start, sustainability can help enterprises to achieve cost savings and greater resilience. Efforts to review resource use, reduce waste and improve efficiency contribute not only to environmental sustainability, but also to enterprises’ bottom line. With rising energy and material prices, as well as supply chain shortages, enterprises that act early to improve resource efficiency will be able to realise sizeable savings and reduce their exposure to price fluctuations. An example is Containers Printers, a leading local packaging solutions company supplying to major brands across nutrition, food and medical industries. An early mover in sustainability, the company begun setting targets for energy and carbon emissions reductions in 2018. An Energy Management team was set up to track energy performance and work on energy efficiency projects, which included the deployment of solar panels on the company’s rooftops, retrofitting factory lighting, and replacing equipment to energy efficient models. These projects helped Containers Printers to achieve significant energy savings and carbon emission reductions, with the deployment of solar panels alone providing annual clean energy potential of 1,800MWh and annual carbon emissions reduction of 800 metric tonnes.
The rising demand for sustainable products and services also presents new growth opportunities for enterprises. A survey commissioned by UOB in 2021 found that about one in three respondents in Singapore are willing to pay more for sustainably-sourced goods and services, while 36 per cent replaced their current purchases with more sustainable alternatives. These findings mirror other overseas studies. There are already examples of enterprises that have benefited from stronger engagement with their consumers from building a sustainable brand. Pure Senses, is a leading retailer of fragrance and beauty products such as Yankee Candle. In 2021, Pure Senses rolled out Purely — a new retail concept incorporating circularity, which include collecting and turning used containers and jars into new products such as terrariums. These efforts have helped Pure Senses to improve its brand proposition and strengthen its connection with customers around the theme of sustainability.
Investments by the Government and industry to green the environment also present opportunities to enterprises. These include the supply of green solutions for the built environment or alternative fuels for various industries. Barghest Building Performance (BBP), an energy efficiency technology company that uses sensors, control systems, and patented software algorithms to significantly reduce energy consumption for commercial and industrial buildings and Equatorial Marine Fuel (EMF), a Singapore oil trading and marine logistics company that is taking steps to supply biofuels and has adopted relevant standards such as the International Sustainability and Carbon Certification (ISCC) to comply with requirements to do so, are but some companies that have benefited from opportunities that have arisen in this space.
Other companies are intensifying their corporate R&D activities and making significant investments in sustainability-focused innovations to capture new opportunities. Penguin International Limited, a Singapore designer-builder-owner-operator of aluminium high-speed craft, is strengthening its portfolio of sustainable, green vessels, including retrofitting their ferries with solar installations and developing Singapore’s first hybrid-electric seagoing vessel. This has allowed Penguin to capture demand for more sustainable vessels, with contracts to construct hybrid-electric vessels, as well as a contract with Shell to develop Singapore’s first fully electric passenger ferries.
So rather than just being an additional cost or compliance factor, we see sustainability as a new capability that can help enterprises achieve business outcomes in the long run. And it is very encouraging to see many businesses beginning to recognise that their long-term success is inextricably tied to sustainability.
Understanding key sustainability concepts
To get started on this journey, enterprises can begin by understanding key sustainability concepts, identifying the relevant sustainability areas that are material and key to their business, and focusing on improvements in these areas. The next stage would be to develop more comprehensive plans to integrate sustainability into their business strategies and operations.
Enterprises should also look at identifying sustainability trends that are relevant for their industries, and look for ways to differentiate their offerings or develop new products and services to tap on the emerging demands for sustainable solutions.
To enable these efforts, it is important for businesses to strengthen the understanding and knowledge of sustainability among management and staff, and set aside time and resources to examine the sustainability issues facing the company.
Government agencies are doing their part to guide and support enterprises in making this transition.
Enterprise Singapore (EnterpriseSG) has introduced a $180 million Enterprise Sustainability Programme. The programme supports companies that want to take their first steps towards sustainability through specially curated courses for business owners that cover key sustainability trends and concepts such as decarbonisation, circular economy and sustainability reporting. The programme also provides support for businesses embarking on projects and building capabilities in areas such as sustainability strategy development, resource optimisation, standards adoption and innovative product development. EnterpriseSG has also spearheaded new platforms such as the Sustainability Open Innovation Challenge to help companies source, develop and adopt innovative sustainability solutions.
The industry too is doing its part. Trade associations and chambers and other industry players are driving industry-specific sustainability plans, and various programmes have been launched in partnership with EnterpriseSG to help enterprises build specific sustainability capabilities, such as reducing carbon emissions or adopting sustainability standards.
With so much at stake, we urge enterprises to adapt and leverage the opportunities offered in this new area, so that they can stay ahead of the competition.
Written by Geoffrey Yeo, Assistant Chief Executive Officer (Urban Solutions, Sustainability & Enterprise Finance), Enterprise Singapore
This article has been republished with permission from Enterprise Singapore. The original article can be viewed at here.