Welcome Address by Mr Masagos Zulkifli, Minister for the Environment and Water Resources, at the Launch of Singapore Exchange's (SGX) Inaugural Review of Sustainability Reports Produced by Singapore-listed Companies, on 4 December 2019

SGX Chairman

Mr Tan Boon Gin,

Ladies and Gentlemen

Good morning to all.  I am pleased to be here this morning at the launch of “SGX’s Review of Sustainability Reports Produced by Singapore-listed Companies”. This is a timely review, as global environmental challenges grow more pressing, and sustainable practices are more important than ever before.

2 The threat of climate change is growing more salient each day. In the past two months, extreme weather events in Japan, Australia, and Italy have caused extensive damage to human life and property.


3 Businesses too are not spared from the challenges and impacts of climate change. The Wall Street Journal featured Matteo Wahba, a restaurant owner whose shop was devastated by the floods in Venice. Faced with up to 35,000 Euros worth of damages he cannot afford, Matteo now has to contend with the possibility of closure.

4 As climate change brings disruption to operating environments, we may see more stranded assets. Business models and costs may also be affected by climate-related policy changes. For example, the prices of carbon credits for transport fuel on the US west coast have soared to new highs as states toughen standards. 

5 And consumer demands are changing with growing concerns about climate and sustainability issues. Increasingly, consumers, particularly the millennial generation, consider businesses’ sustainability profiles when making consumption decisions. Businesses that do not keep pace with these developments will be left behind.


6 But not all is doom and gloom. Climate change also brings new and exciting opportunities for businesses.

7 For one, the trend towards sustainable consumption is an opportunity to be seized. A 2019 research paper from NYU Stern found that 50 per cent of the growth in Consumer Packaged Goods between 2013 and 2018 came from sustainability-marketed products. 

8 Solutions to climate challenges are also catalysing the growth and development of new industries. The same policy changes in the US that caused skyrocketing carbon credits prices have also driven investment in clean energy and biofuel. Right on our doorstep, in ASEAN, there is increasing demand for renewable energy.

9 These opportunities can be found in the finance sector too. According to the Business and Sustainable Development Commission, the shift to sustainable economies in Asia represents some $5 trillion of investment opportunities between now and 2030. In Singapore alone, over $6 billion of green bonds have been issued to date.

10 In this new landscape of risks and opportunities, corporations are at a crossroads – 
those that wish to remain relevant must actively transition towards a more sustainable way of doing business. Allow me to share three ways in which businesses can do so.


11 First, businesses can shape a culture of sustainability in their organisations. Many companies in Singapore are stepping up. For example, HSBC has set targets to reduce their carbon emissions, energy, waste, water, and paper; and aims to source 100 per cent of their electricity from renewable sources by 2030. They also have an active staff volunteer community that gives its time and energy to nature conservation initiatives.

12 But promoting a culture of sustainability does not only entail ambitious or large-scale change. Start small. Keep the air-conditioning temperature at 25 degrees Celsius. I don’t think we need to add clothes to wear every day. Eliminate or reduce the use of disposable cutlery in the office. Install recycling facilities. Educate employees on sustainability best practices. Every effort, added together, and kept up over time, will have a real and sustained impact.


13 Second, businesses should factor Environmental, Social and Governance (ESG) principles into their decision-making processes. By doing so, businesses will be better prepared for climate risks among others, and be well-positioned to take advantage of the opportunities.

14 Companies should also assess and manage sustainability risks when considering new ventures. DBS Bank recently adopted the ‘Equator Principles’, a globally recognised framework for financial institutions to determine, assess, and manage environmental and social risk in projects. Adopting established frameworks such as these is one way for businesses to ensure proper risk accounting.

15 Another way that businesses can account for risks is through shadow carbon pricing, to capture the external costs of carbon emissions. Through this, businesses will be able to make more informed cost-benefit analyses when assessing the viability of a certain project, and stay ahead of the curve as the world undergoes its low-carbon transition.

16 Sustainability is an important consideration when deciding what opportunities to pursue. Last month, Temasek Holdings announced their goal to halve the greenhouse gas emissions of its entire portfolio by 2030. Tiong Seng Holdings recently announced that it has secured a $70 million green loan to finance construction projects with "clear environmental benefits".

17 These businesses demonstrate that economic growth can go hand in hand with protecting the climate and environment.


18 Finally, to complement their sustainability efforts, businesses should uphold transparency and accountability as a cornerstone.

19 Sustainability reporting is an important piece of the puzzle.  Transparent reporting protects against ‘greenwashing’, or the practice of advertising a company as more environmentally friendly than it really is.  This helps investors make better informed decisions when considering where to direct their capital.

20 Where companies are doing well, investors and clients will be able to see this. Where there is room for improvement, companies will be able to identify where they are currently lagging behind, and develop targeted strategies to improve.

21 SGX has played an integral role in catalysing a shift towards increased transparency in sustainability reporting in the private sector. In 2011, SGX introduced a voluntary sustainability reporting regime. In 2016, it expanded this regime, requiring listed issuers to publish annual sustainability reports on a ‘comply or explain’ basis.

22 I am delighted to report that with the implementation of SGX’s mandatory reporting requirements, the number of Singapore-listed issuers communicating their sustainability disclosures has increased substantially. Furthermore, almost all listed companies produced their sustainability reports on a timely basis following the mandating of the requirement. I understand that many of these companies are represented today. Congratulations to all for taking this first important step.

23 I encourage all companies to do more, be it to improve the quality of reports or expand the scope of reporting. For companies not under the SGX regime, this could mean taking the initiative to publish sustainability reports on their own accord.


24 To support businesses and empower them to become more sustainable, the Government has several policies in place. We have enhanced our industry energy efficiency schemes. We have also introduced a carbon tax, to send an economy-wide price signal on the need to reduce emissions. The government is prepared to spend more than the estimated $1 billion in carbon tax revenues collected in the first five years of its implementation, not to fund its fiscal expenditures, but to help businesses become more energy and carbon efficient.

25 On the green financing front, the Monetary Authority of Singapore (MAS) recently announced a green finance action plan. To be a leading centre for green finance in Asia and globally, MAS will drive efforts that build financial resilience to environmental risk, and develop green finance solutions and markets. A major component is the Green Investments Programme, which will invest up to US$2 billion in public market investment strategies that have a strong green focus. Grant schemes that support the mainstreaming of green and sustainability loans will also be developed.

26 In addition, MAS will support the expansion plans of external reviewers and rating agencies to deepen technical expertise, and anchor Centres of Excellence from leading institutes and universities that can contribute to Asia-focused climate research and training programmes.

27 MAS will also issue Environmental Risk Management guidelines across the banking, insurance, and asset management sectors. These guidelines will set standards on governance, risk management, and disclosure. MAS will also continue to encourage financial institutions to take reference from the recommendations of the Task-force on Climate-related Financial Disclosures (TCFD) in their climate disclosures. This will enhance the quality of decision-useful, forward-looking information on the material financial impact of climate-related risks and opportunities.


28 To conclude, the transition to a low-carbon future is a given. Every sector, every stakeholder, has a critical role in securing a sustainable future for Singapore. We must change the way we consume resources and grow our economy, and businesses have a key role to play in this change. Together, we can create a world that serves both present and future generations.

Thank you.

Filter / Show By Category