Sustainable technologies that help enhance energy efficiency, make resource recovery possible, and reduce waste have reached a point where it makes economic sense for a company to adopt them. But their uptake remains low in Singapore due to significant barriers, said Permanent Secretary Choi Shing Kwok of the Ministry of the Environment and Water Resources.
Speaking on Thursday at a panel discussion co-organised by Japanese multinational Ricoh and Eco-Business on “Small island states and sustainable development: Singapore’s experience”, Choi identified a lack of capital and expertise as the two main barriers holding Singapore’s industry sector back from achieving greater energy and resource efficiency.
“It is imperative that we improve energy efficiency in the business sector”, said Choi. “A technical analysis has been undertaken, and the conclusion is that there are many ways we can improve energy efficiency in the industry sector. Many of these ways are even economically rational – that is, if the industry did it, they would actually save money”.
However, Choi went on to explain that when most companies look at how to deploy the scarce capital they have, they do not usually put it into energy efficiency projects, because they yield lower returns on investment compared to other projects.
“Most companies would not give this high priority, even though it makes sense”, he said.
Another factor that keeps companies from implementing sustainable technologies is a lack of know-how, noted Choi. “This pertains more to smaller companies, but there is a lack of expertise and knowledge about the ways to reduce energy consumption and be more energy efficient”.
Singapore is adopting a whole-of-government approach to address these issues, as well as mitigate its overall greenhouse gas emissions, he shared.
“Through the National Environment Agency and other partner agencies, we are trying to educate companies and provide grants to facilitate organisations to engage experts to study their companies, and identify potential energy efficiency options”, Choi shared, referring to Singapore’s Energy Efficiency Improvement Assistance Scheme.
The government is also providing direct financial assistance to companies to implement energy efficient technology. Whether a company is starting a new plant or facility, or upgrading an existing one, there are grants available to help bridge this capital financing gap.
“These initiatives require a co-funding approach rather than total funding from the government… but it helps to give a nudge to help convince their headquarters that this is a worthwhile project, and it also helps increase the return on investment,” he added
Kwok Yan Hoe, general manager of sustainable design at Keppel Land, added that human behaviour was also a key consideration driving the uptake of energy efficiency measures in the building sector, which is also a major source of greenhouse gas emissions in Singapore. “If you look at energy consumption in a building, it may not be obvious that half of the energy consumed is actually from the tenants. Even if we build what would be considered a Green Mark Platinum Building, we are back at square one if the tenants do not go green”, he said, referring to the Singapore Building and Construction Authority’s certification scheme for green buildings.
To address this behavioural gap, he said that initiatives such as the BCA Green Mark Scheme for Office Interiors – which promotes the use of environmentally friendly features and sustainable practices by tenants - as well as awareness raising campaigns by non-profit organisations were useful.
Encouraging businesses to do the right thing
Fellow panellist Kenneth Richards, Musim Mas chair for sustainability at the National University of Singapore added that in addition to government support to encourage businesses to adopt energy and resource-conserving technologies, civil society organisations were a crucial factor that could drive businesses to do the “right thing”, even when market forces or government legislation did not compel them to do so.
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If doing the right thing puts companies at a competitive disadvantage, they are not going to be in business for long.
Kenneth Richards, Musim Mas chair of sustainability, National University of Singapore
“Most businesses are happy to compete in markets and abide by the rules laid down by governments. For many businesses, it stops there”, said Richards. But in reality, this is insufficient because such an approach is vulnerable to market failures such as when the negative impact of a product on external things such as the environment might not be factored into its true cost.
While legislation and regulation were intended to address these market failures, governments might not be able to address every single market failure due to many reasons, including limited resources, imperfect information, corruption or political gridlock, he explained.
In light of market failure and government inability to correct these, some businesses might respond to an appeal to moral duty to “do the right thing” – but, if these firms took concrete actions to reduce their environmental impact, while their competitors did not, they would lose out in the market, Richards observed.
“If doing the right thing puts companies at a competitive disadvantage, they are not going to be in business for long”, he said.
But this is where individual consumers and civil societies come in. Richards recalled a successful campaign by Greenpeace to get food and beverage giant Nestlé to remove unsustainably-sourced palm oil from its supply chain to illustrate how civil society can spur businesses to better practices when governments and markets fail to do so.
“This is a complex environment in which businesses are competing”, said Richards. “Civil society organisations like Greenpeace, WWF play a very important role after we’ve addresses market failure, government failure and moral failure”, he said.
Sustainable business to ‘green the red dot’
The panel discussion on Singapore’s sustainable development challenges was part of Eco Action Day, an annual initiative by Ricoh to engage corporate partners to do their part for the environment. Held on 5 June every year to commemorate the United Nation Environment Programme’s World Environment Day (WED), Eco Action Day engages businesses and individuals by inviting them to pledge actions that will conserve energy and resources.
The panel comprised of Choi Shing Kwok, permanent secretary of Singapore’s Ministry of the Environment and Water Resources; Adrian Lim, head of the managing director’s office, Ricoh; Jose Raymond, chief executive officer, Singapore Environment Council; Christopher Ang, executive director of the Singapore Compact for Corporate Social Responsibility; Kwok Yan Hoe, deputy general manager of sustainable design, Keppel Land; and Kenneth Richards, Musim Mas Professor of Sustainability at the National University of Singapore.
This year, the campaign scored a record number of pledges from 180 organisations and 300 individuals, a development which, Chris Yoshiki, assistant general manager of service & environment division, Ricoh Asia Pacific, said, “motivated Ricoh to continue this meaningful campaign”.
Reflecting on the success of the campaign and the motivation behind it, Lim, added, “Eco Action Day may not have an immediate return on investment, but we are just trying to spread awareness about the environment”.
The theme for Ricoh Singapore’s Eco Action Day’s campaign this year was “Green the Red Dot, Join the Movement”. It reflects the UNEP slogan for World Environment Day, “Raise Your Voice, Not the Sea Level” which shines the light on the urgency to help islands address the growing risks and vulnerabilities as a result of climate change.
The company’s branches in other countries also observed Eco Action Day; Ricoh India, for example, themed the event “Think and Act - as you are”.
A.T. Rajan, Ricoh India’s chief marketing and strategy officer, said the theme was aimed to get participants to “analyze their eco behavior and try more voluntary, unique eco actions to do our bit for the environment”.
In Singapore, the inaugural panel discussion aimed to raise the level of awareness and action engendered by Eco Action Day “by bringing business leaders, policymakers and civil society together to discuss strategies for Singapore to balance economic growth with mitigating and adapting to climate change, and raise awareness of the challenges faced by small island developing states”, said Jessica Cheam, editor of Eco-Business, who moderated the panel discussion.
“It is easy to forget small island developing states [like Kiribati, Tonga and Vanuatu, among others] because they are not so visible globally”, she noted.
“But perhaps this is where Singapore can fly the flag of the small island developing states which it is a member of, and raise awareness for these islands. Singapore’s developmental success has placed it in a good position to tackle the challenges of mitigating and adapting to climate change”, she added.
