Why sustainability should matter to businesses amidst the current post-pandemic recovery
By Tham Kok Wing, Accredited Member, Institute of Public Relations of Singapore (IPRS) Head, Industry Development, Singapore Environment Council
This article was originally published on ASME on 19 October 2021 and has been reposted with permission from the Author.
- The pressures on global businesses to take proactive steps to tackle environmental sustainability issues are growing by the day.
- Financial institutions are re-looking their business portfolios to go green, given the drive to transform businesses to be sustainable and environmentally friendly.
- Sustainability is not just about saving the planet by reducing carbon emissions, but also a solution for enterprises to future proof their businesses.
The Singapore economy and most businesses are still reeling from the devastating effects of the COVID-19 pandemic. The shocks and damage experienced include supply chain disruptions, collapse of long-standing business practices and models, rising distress brought on by a lack of resources, new expectations and demands from customers, amongst others.
Equally, there are some silver linings and positive developments such as the accelerated pace of digitalisation amongst customers and businesses, uptick in adoption of new technology and innovations, and the augmented spotlight on sustainability as key to unlocking a greener economy.
Undoubtedly, sustainability has become a buzzword. It is inevitably heard in everyday conversations, whether at business, social and personal occasions.
Sustainable business drivers
While most people relate living sustainably to saving energy, going paperless, eating less meat, taking public transport instead of driving, etc., which actions are actually relevant and meaningful to industries and businesses?
Here are four important things that may not be obvious to many businesses but are extremely poignant when driving sustainability beyond our personal lives:
1. Resource efficiency
Running a business is a highly resource-intensive undertaking. Any business in Singapore needs to tap on energy (electricity) and water, along with generating waste directly and/or indirectly in the course of delivering products and services to customers.
Resource efficiency can be achieved in a myriad of ways from adopting sustainability practices to improving process transformation, acquiring new and smart technology, changing mindsets, behaviours and approaches. These are proven ways to improve resource efficiency that tantamount to attaining overall cost savings. This immediately shows up in the businesses’ bottom line.
2. Regulatory and procurement protocols
Rather than waiting to address and re-align with regulations and protocols, it is better for businesses to take a proactive approach.
The pressures on governments and global businesses to take proactive steps to tackle environmental sustainability issues are growing by the day. The Paris Agreement of 2015 is just one of the many key developments that led to nations of the world making public commitments to reducing carbon emissions. Likewise, global brands and businesses are also under the gun and have done the same, pledging to combat climate change and greenhouse gas emissions.
As a result, there has been an acceleration of top-down regulations, legislations and business protocols to encourage the rest of the world to fall in line.
In Singapore, we have the Carbon Tax (2019), Sustainability Reporting for listed companies (2016), the Resource Sustainability Act (2019), Mandatory Packaging Waste Reporting (2019), Extended Producer Responsibility (EPR) by 2025, Electronic Waste and Food Waste EPR, and Deposit Refund Scheme (anticipated announcement soon). All of these are no longer optional for businesses – they have to comply else they run afoul of the related regulations.
The answer lies in getting the necessary sustainability processes, protocols and practices in place to stay within the prescribed expectations. Rather than waiting to address and re-align with regulations and protocols, it is better to stay ahead of the curve than fall behind.
3. Supply chains
If the business you are running is part of the supply chain to big global brands, or a supplier to the public sector, it would almost be a foregone conclusion that green procurement guidelines will kick into place sooner or later. While it may not be mandatory now, it is only a matter of time before sustainable supply chain requirements make its big presence felt. Failure to address this development can become a huge disadvantage for smaller businesses as there will always be more nimble and progressive players who are sustainability-ready to take the place of those who are ill-equipped or totally out of line.
4. Funding
The buzz around sustainability and the urgent call to reduce carbon emissions have created a rather positive side effect – one that can be a benefit to smaller businesses. The one key gripe that most small and medium-sized enterprises (SMEs) face on the road to post-pandemic recovery is funding. This is where sustainability holds the key to unlocking some of the grants, funds and loans that are increasingly available for such efforts.
Given the drive to transform businesses to be sustainable and environmentally friendly, financial institutions (e.g. banks) are re-looking their business portfolios and greening them. The pace has been accelerating as evident from the aggressive and renewed push to issue Sustainable Linked Loans (SLLs) and Green Loans. Generally, the eligibility criteria guiding such loan frameworks are based on sustainable and environmental objectives.
There are also industry sustainability funds offered by various government agencies in support of businesses that are transforming themselves for a sustainable-ready future.
It is clear that sustainability is not just about saving the planet through carbon emission reduction, but also a lever that enterprises can pull to future proof their businesses.