How much do Singapore businesses care about sustainability?

New research released by Eco-Business reveals that most companies in Singapore still don’t see a clear connection between corporate responsibility and profitability.

Singapore's central business district, home to the Singapore Stock Exchange (SGX). SGX recently mandated all listed companies to submit annual sustainability reports from financial year 2017 on a ‘comply or explain’ basis. Image: Igor Plotnikov /

Singapore-based companies are starting on the journey towards sustainability, although most of them have not yet made the connection between corporate responsibility and profitability.

This is the main finding of a new survey conducted by Eco-Business, a leading online media covering business and sustainability in Asia Pacific.

The survey was conducted in June 2016 among 404 respondents in the Asia Pacific region, of which 352 are based in Singapore, on their attitudes towards business sustainability.

The survey revealed that manufacturing companies are more advanced in their consideration of sustainable business practices than those in services.

Multinational companies claim to have more robust sustainable business practices than local companies, although senior executives from both types of companies differ in their opinions on the sustainability of their operations compared with the views of their line managers.

Energy efficiency tops the survey as the most adopted sustainability practice, with 89 per cent of respondents saying their companies have energy efficiency policies and practices in place. Presumably, this is the one obvious area of sustainability that directly impacts their bottom line.

A common feeling from respondents was that corporate attitudes towards sustainability were somewhat starting to gain more traction in Southeast Asia, with a director of a multinational automotive company commenting: “This is still a very ‘young’ topic in APAC, especially in Asean. But it is getting more traction.”

When you look at some of the oldest companies in the world, you’ll usually find that their sustainability culture, particularly in terms of their ethical and responsible behaviour towards the planet and its people, has ensured their survival and long-term prosperity.

Colin Lee,director of corporate affairs, Cargill

Companies integrate CSR, but what does it mean?

About 80 per cent of respondents said that their companies integrate Corporate Social Responsibility (CSR) into their business practices, although how this was defined was largely left up to them.

A director of an agri-sector multinational company commented that “there are many large organisations that have CSR policies and report on their CSR ambitions. Many of these organisations do not follow up the walk with the talk”.

One automotive industry director said that “CSR reporting has a long way to go in Singapore. There is a need to provide incentives such as tax breaks to organisations that have some form of CSR systems in place”.

Interestingly, the survey revealed a gap in perspectives on CSR between senior executives and their line managers. For instance, 47 per cent of CEOs agreed or strongly agreed that their employees demanded sustainability whereas only 22 per cent of managers felt the same way. 

Similar differences in opinion occurred with the perception of customers’ demands for sustainability and the organisation’s care to become energy efficient, with chiefs being much more optimistic than their managers on the effectiveness of their corporate energy efficiency programmes and operations.

Also, nearly 70 per cent of chiefs felt that their organisations were more sustainable than their competitors, whereas only 42 per cent of managers felt the same way.

Colin Lee, director of corporate affairs at Cargill, said: “Clearly, more companies need to start treating sustainability as a core value. When you look at some of the oldest companies in the world you’ll usually find that their sustainability culture, particularly in terms of their ethical and responsible behaviour towards the planet and its people, has ensured their survival and long-term prosperity.”  

Sustainability must come from within

Perhaps the most revealing finding is that the lack of employee focus and consumer demand for sustainability was apparent across all respondents.

Only 33 per cent of respondents agreed or strongly agreed with the statement “employees in my organisation ask that we have a sustainability policy”.

One chief sustainability officer of a listed property developer in Singapore commented that the country is “lagging behind in the areas of responsible financing and green consumerism which are key drivers for corporate sustainability.”

This feeling was reinforced by a vice president from a local construction company in Singapore who said: “Many, including my organisation, have not felt the effects of having sustainability as a moral and ethical requirement. There is no compulsion. Business just goes on without the need of sustainability as an inherent requirement.”

Dave Mackerness, business development director of Kaer, an energy-efficiency organisation, was not surprised to see some of the results of the survey.

He identified three factors that will encourage companies and their stakeholders to practise and better manage sustainability, including a regulatory environment that continues to raise everyone to higher standards, organisations that target specific KPIs in terms of energy use and resource management, and CEOs and COOs to get more comfortable with the idea of asking for outside operational help on the journey towards sustainability.

“This might well mean outsourcing their non-core areas of competence so that they can focus on the things they do best,” he added.

‘Comply or explain’

With the Singapore Exchange (SGX) mandating all listed companies to submit annual sustainability reports from financial year 2017 on a ‘comply or explain’ basis, the survey also asked companies on how they are aligning with this new directive from the bourse.

Only 38 per cent of respondents agreed or strongly agreed that their organisations had implemented sustainability reporting. The chief sustainability officer of a multinational construction company in Singapore added: “SGX’s mandatory sustainability reporting …. will help fast track adoption of sustainability in Singapore.”  

At present, though, this will require a change in mindset. A director of a local services company in Singapore commented: “Sustainability is never even a moment of consideration for any of our clients. Financial compliance is, but this is also a relatively new focus for our clients, stricter reporting of expenses, hours etc”.

Commenting further on this, Assaad Razzouk, CEO of Sindicatum, a renewal energy company headquartered in Singapore. said: “Most institutional investors in Asia, regrettably, still think COP21 and COP22 are HBO mini-series. There’s a tremendous investment gap between the aspirational goals of governments around the world and the equity funds available to build clean energy infrastructure worldwide, especially in Asia ex-China.”

Eco-Business research director Tim Hill noted that what is clear from the survey is that the corporate world in Singapore is starting to take steps towards sustainability.

“The ‘comply or explain’ mandate from the Singapore Stock Exchange has come at the right time to guide Singapore-listed companies in the right direction.  Hopefully, their journey along the path to sustainability will help to influence supply chains, competitors, other vendors, consumers and other stakeholders at home and in the wider Asean region,” he said.

 For more information on Eco-Business research services, contact Tim Hill.

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