With energy costs spiking amid the conflict in the Middle East, the Singapore government has called on the country’s small-to-medium-sized enterprises (SMEs) to adopt climate solutions that ease their power bills.
Speaking at an event hosted by sustainability consultancy Global Green Connect (GCC), Low Yen Ling, senior minister of state for the Ministry of Trade and Industry & Ministry of Culture, Community and Youth, said companies should make use of an energy efficiency grant to purchase climate solutions that cut electricity bills.
Although the Energy Efficiency Grant (EEG) grant was slated to end in March, it has been extended by a year as a result of the war on Iran. It gives firms in all sectors — though it was originally intended only for firms in food services, retail, manufacturing, construction, maritime and data centres — access to up S$30,000 in funding to buy solutions that lower their energy use.
“We are now really talking about green solutions making an impact, especially in times like this. In the next few months, the elevated energy costs will stay at that level,” warned the minister.
Energy prices in Singapore are increasing, with second-quarter household tariffs rising by 2.1 per cent to 29.72 cents per kilowatt hour due to higher natural gas costs. Singapore’s electricity supply is almost entirely dependent on fossil gas, which 94 per cent of the electricity generation in 2023 according to International Energy Agency data.
“Since 28 February this year [when Israel and the US military operation against Iran began], SMEs who have already started on the green journey now have more options,” she said.
Low also called on more SMEs to report their emissions to kick off their sustainability efforts. While sustainability reporting is not mandatory for SMEs, most form part of larger supply chains that will require accountability for their carbon footprint and climate-related risks, she said.
Starting this year, Straits Times Index-listed companies will be required to report Scope 3 emissions across their value chains, which is expected to increase demand for credible emissions data from suppliers, including SMEs. Scope 3 are the total emissions from the full supply chain.
However, high costs, consumer apathy and slowing climate action globally have put many of Singapore’s SMEs off implementing environmental sustainability practices according to industry-wide surveys, with only a handful pursuing environmental, social and governance programmes where it makes business sense.
Sustainability ‘hype’ era is over
A delay to mandatory climate reporting for most Singapore-listed firms introduced last August may not be the setback for climate action that many believe it to be, said Jiehui Kia, director of engineering decarbonisation solutions provider Shin Seiki.
Speaking on a panel of solutions providers at the event, Kia said the delay could be having the “unintended positive effect of clearing out a lot of the greenwashing noise that was prevalent at the peak of the sustainability hype.”
The previous timeline — for all listed firms to report all of their emissions, including Scope 3, by 2026 — sent a strong message to all businesses in Singapore that environmental, social and governance (ESG) performance will inevitably become a business operating reality, Kia said.
“There was excitement — but also panic and scepticism about how achievable the disclosure requirements were for the majority of companies,” said Kia, who was previously a sustainability consultant for international sustainability organisation Forum for the Future.
She said that now that the “dust has settled”, Singapore firms will have heightened awareness about ESG as part of their long-term business reality, and the opportunity to evaluate “truly meaningful action.”
“In many cases, this may not be to allocate a large bucket of resources to producing reports often incurred as costs by hiring third-party consultants, or experts who have little understanding of operational realities,” she told Eco-Business on the sidelines of the event.
Her comments come in the same week that Singapore-based sustainability consultancy The Transmutation Principle announced it was winding down. Other sustainability consultancies have been struggling to stay afloat following the disclosure delay.
The panel argued that sustainability in Singapore had entered a new phrase of implementation. Jeff Seah, executive director and co-founder of recycling firm Redux SG, said more companies now need to go beyond the reporting phase. “A sustainability report does not remove carbon,” he said.
Carmen Calisto, chief strategy and marketing officer of transport data analytics firm Cartrack, said that selling climate solutions increasingly involves downplaying green credentials at a time of ESG pushback.
“I get business from selling sustainable solutions, but not by branding it as sustainability,” she said. “We don’t want grudge purchases,” she said, referring to consumers who feel pressured to buy products because they are marketed as better for the planet.
“We go in and say we’ll save you 30 per cent of your fuel in three months — but we won’t use the word ‘sustainability’”, she said.
The event saw the signing of a memorum of understanding between GGC and solution partners Cartrack, Charge+, ISOTeam, Redux and Shin Seiki to begin implementing a decarbonisation roadmap in line with Singapore’s Green Plan.
It took place the week after a study by the International Energy Agency found that climate solutions to reduce energy consumption are not being deployed fast enough to account for the surge in energy consumption for artificial intelligence.
