Finding the right balance between economic goals and sustainability initiatives
Here is a summary of key points discussed at the roundtable on ‘Navigating to net zero in a fast-changing world’, with panellists from the banking, tourism and energy sectors
ROUNDTABLE PANELLISTS: •Yoon Young Kim, cluster president of Singapore, Malaysia and Brunei, Schneider Electric; •Mike Ng, head of global wholesale banking sustainability office, OCBC; •Thien Kwee Eng, CEO, Sentosa Development Corporation. Moderator: Janice Lim, correspondent, The Business Times
Could each of you share the net-zero strategies or pathways your organisation has laid out or implemented to achieve the targets you’ve previously set?
It’s important to set the right targets, but difficult to figure out what the “right targets” are. Schneider Electric’s cluster president of Singapore, Malaysia and Brunei, Yoon Young Kim, said that rather than fixating on refining the target itself, setting a target should be more about deciding the strategic intent and direction for navigating the sustainability journey.
Understanding the baseline is extremely important, but again not a simple task. Schneider Electric has been working with different stakeholders to measure their baseline as precisely as possible, but notes that it will “never be 100 per cent precise in the early stages of the journey”. More importantly, however, it should lead to more intentional discussions of approaches, technologies and behaviours.
OCBC recently announced its newest decarbonisation targets, which includes the decision not to extend project financing to upstream oil and gas projects that obtained approval for development after 2021.
Within the power industry, OCBC targets to reach net zero by 2040. Mike Ng, OCBC head of global wholesale banking sustainability office, said that they intend to support the just transition by using emissions intensity as their metric, allowing them to grow their portfolio in the power sector.
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Lastly, Sentosa Development Corporation (SDC) launched their Sustainable Sentosa strategic roadmap in 2021. Under the plan, SDC aims to achieve carbon neutrality by 2030 and become a globally recognised, certified tourism organisation.
SDC started by undergoing carbon profiling, which entailed getting all island partners to complete a carbon profiling exercise. This gave them an idea of the carbon emissions generated by individual island partners, and allowed them to identify the key “needle movers”.
Aside from exploring solarisation, building efficiency and water harvesting, SDC also set up the Sentosa Carbon Neutral Network, a business alliance involving 25 partners from hotels, attractions, and food and beverage operators on the island. Together, all island partners have pledged to remove plastic bottles by the end of 2023.
How does SDC balance the natural habitats of Sentosa island while serving the economic purposes of a tourist destination?
With over 10 per cent of Singapore’s heritage trees, vibrant marine life and biodiversity, Sentosa has a thriving biohabitat. In order to become a globally recognised sustainable tourism destination, SDC CEO Thien Kwee Eng emphasised the importance of value creation, as well as finding a balance between what is good to do and what is smart to do.
This means that when curating tourism experiences on the island, the lush environment and biodiversity should be seen as complementary to the experience, rather than at odds, to leverage all that the island has to offer.
For instance, as Sentosa is visited by the critically endangered Hawksbill turtles, SDC has put up incubators to protect their nursing spots and invited researchers from local universities to study the growth of the turtles. These initiatives make use of the island’s natural resources and turn them into a site for consumer education.
How do companies represented on the panel balance short-term economic goals with sustainability-based long term investments?
In 2019, OCBC’s decision to cease financing of coal power plants was not made without hesitation. Coal power plants are still needed in South-east Asia, and ceasing financing would also cut off a revenue stream generated from such plants.
However, after giving it up, OCBC realised that the income they had to forego from the thermal space was “nothing compared to the opportunity (they) uncovered as a result”.
Letting go of one part of the business gave them the time, financial resources and human resources to dedicate their efforts to exploring renewable energy options. They have also been able to explore markets that they traditionally would not have explored, expanding their reach to UK, Europe and other areas outside of their usual Asean focus.
On the other hand, Schneider Electric’s Kim noted that while it may be easier to analyse company statistics, not everything on the sustainability journey is quantifiable. He finds long-term value in the ability to attract the “most important and interesting” talents, shareholders and investors in the market through their company values and focus on sustainability.
Given what we know now about the climate crisis, what would you have done differently in your sustainability journey?
As a hospitality business, SDC finds that the biggest needle mover is consumer behaviour. Hospitality businesses are subject to the expectations of their consumers, and juggling consumer expectations with sustainability progress has certainly been challenging.
Thien said: “Even in simple things like local food sourcing – 30 by 30. I mean, we can have a lot (on) the supply side: vertical farming, alternative protein, but does the consumer eat that? Does it drive adoption? That’s key.”
Had she known this earlier, Thien notes that she would have invested more time and resources in staff engagement, culture building and consumer education.
While OCBC counts itself lucky, having started their sustainability journey in 2018 back when “nobody really was talking about sustainability”, they struggled with the lack of education and awareness of this topic.
OCBC’s Ng offered a note of encouragement to businesses considering incorporating sustainable measures, saying: “Unlike the time when we started doing it, there’s actually a lot of knowledge of (sustainability) at the moment. Whether you’re talking about literature, NGOs, think tanks, banks, consultants, it’s a very developed area now.”
Finally, Schneider’s Kim prefers to “look forward rather than backwards”. He recognises the potential in the next generation, looking to channel their resilience towards improving business practices, “accelerat(ing) the (sustainability) journey for the benefit of all of us, and especially for the next generation”.
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