Sustainability both a risk and opportunity

Speaking at the Responsible Business Forum, Singapore’s Second Minister for the Environment and Water Resources Grace Fu said sustainability has to feature in business decisions and be discussed at boardrooms.

Singapore’s Second Minister for the Environment and Water Resources Grace Fu on Tuesday urged businesses to be aware of their responsibility to the environment, observing that being sustainable can also open up business opportunities.

Addressing 450 business leaders at the Responsible Business Forum on Sustainable Development, Fu said: “Industries have to play their parts by adopting sustainable and responsible practices. Environmental sustainability has to feature in business decisions and [be] discussed at boardrooms.”

Fu, who is also Minister in the Prime Minister’s Office, said sustainability can be both a risk and opportunity for local firms. For instance, if firms do not meet importing nations’ sustainability requirements, such as palm oil standards from Europe, they will lose market share.

At the same time, consumers are now demanding greater product sustainability, and this can be an opportunity for small firms to offer high-value products and services and carve out a niche, she added.

For Singapore, one such area is in green building and township planning. Its skills in these fields and experience in tackling resource constraints can be exported to the region and beyond, Fu said. Already, countries like Vietnam, China and Indonesia have signed up to Singapore’s Green Mark certification scheme.

The country’s Sustainable Singapore Blueprint, released earlier this month, outlines its strategy in becoming more sustainable, including targets to raise the domestic recycling rate from about 20 per cent today to 30 per cent by 2030, and measures to green its buildings and improve walkability.

“We hope to make Singapore a test-bed for smart urban solutions,” she said. “We see business potential in exporting such solutions to the region and beyond.” 

WWF Singapore chief executive Elaine Tan echoed the minister’s remarks. In her keynote address, Tan outlined the problem in stark terms: humans are consuming faster than the planet can renew its resources.

“If everyone consumes like the average Singaporean, we’d need four planets,” she said, highlighting a finding outlined earlier this year in the NGO’s latest Living Planet report, a biennial analysis of the state of the Earth’s resources.

Companies have a “huge influence” over how things are produced, and consumers today are demanding more sustainable products and services. Businesses that take responsibility for their supply chains can help shape how goods are processed, produced, and consumed around the world,  she added.

Key business trends

So how can new innovations - in technology, finance, policy, and ways of doing business - be used for positive social and environmental change?

Speaker Sally Uren, chief executive of international non-profit Forum for the Future, described three key trends that businesses face, which can either have positive impacts  if firms harness them, or negative ones if they fail to address them.

Uren spoke of “ultra-transparency”, referring to the digital era in which there is no room for firms to hide misdeeds, as consumers can simply go online to look up the track record of a firm’s suppliers. She also cited how electric car maker Tesla is publishing all its patents in a move to raise transparency, allowing other firms to develop similar electric cars and unlock consumer demand for electric cars.

These days, QR (optical reader) codes on say chocolate packaging also allow consumers to track where their snack has been produced and shipped, Uren said. This can be a communications tool, sparking “new conversations with consumers about where your products come from”.

She also noted that many brands are taking control of their entire supply chain, from growers of raw materials or even the land those crops are grown on. This enhances security of their supply but also raises equality issues. For example, when rich countries buy large pieces of farmland in other nations, they may compete with local populations for access to food.

Disruptive innovation to drive growth

The trends Uren outlined can be forms of disruptive innovation. But the panel session that followed delved into a deeper philosophical question: is disruptive innovation always a good thing?

It can be, such as when technology is tapped to boost equitable growth, said panellists. Asian Development Bank director-general of private sector operations Todd Freeland cited how ADB had invested in a firm that put solar panels on village hut roofs in rural areas and where families pay for these using phone payment systems. That boosts environmental sustainability and gives rural residents access to energy. 

But  it can also harm - for instance, the sharing economy (in which owners rent out items they are not using, such as power tools or cars) can displace people from established jobs, said panel moderator Haslinda Amin of Bloomberg TV.

Other innovations are needed, in finance and policy fields, added the panellists. One innovation is the rise of microfinancing in recent decades, which gave small entrepreneurs access to finance where conventional banking institutions would not venture.

Anil Menon, president of Smart + Connected Cities at networking giant Cisco, said governments have not yet come up with policies to leverage new technologies, such as telepresence, to provide the services their populations need, such as education, so businesses have had to fill the gap.

He shared how  Cisco and chocolate manufacturer Hershey worked on a project in 2012 using telepresence technologies to educate elementary students in Ghana - a cacao-producing country and key raw-material source for the chocolate maker - alongside their peers in Pennsylvania.  He shared this as an example of  how businesses can use technology for good.

“The future isn’t something that happens to you; you can shape the future,” Uren said, urging firms to be prepared for the future. “Tomorrow’s risk absolutely is today’s opportunity.”

The forum, held at the Sands Expo and Convention Centre and organised by Global Initiatives, Eco-Business, in partnership with Singapore’s Nanyang Technological University and the World Wide Fund for Nature, aims to have business leaders, NGOs and policymakers come up with practical recommendations for sustainable growth.

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