CONSUMER preference is becoming a key driver of business adoption of sustainable strategies and practices.
Research released by YouGov last year showed that 50 per cent of people in the Asia-Pacific region believe that businesses have the responsibility to ensure that their supply chains do not harm the environment.
This figure further increased in Singapore to 56 per cent and 63 per cent in the Philippines, with Jen Teo, executive director of the Singapore Environment Council highlighting that millennials were the drivers in spending more on sustainable goods. "Companies that embrace sustainable and ethical practices will do better in the long run as more Singaporeans choose their products and services over those of their competitors."
It is clear that market signals like these that are driving increasing interest and commitment to sustainable sourcing and manufacturing practices by business.
For much of the last 100 years, the mainstay of business growth has been the linear "take-make-waste" economic model which paid little attention to the long-term outcomes for the environment. Today, companies at the cutting edge are embracing the circular economy - an economic model that designs out waste and pollution, keeps products and materials in use for as long as possible and recovers what is considered waste, using it as a resource for production.
Currently, more than 90 per cent of used materials are discarded rather than cycled back into the economy. Put simply, this means valuable resources are literally going to waste. The circular economy makes better use of our planet's limited resources and is estimated to have the potential to generate US$4.5 trillion of additional economic output by 2030.
WAVES OF CHANGE
Pioneering the transition to the circular economy presents companies with new and diverse opportunities for growth. The "Waves of Change" collaboration between high-performance surfboard maker, Starboard, and DSM, a purpose-led global science-based company, is a novel example.
The premise of DSM's business strategy lends itself to creating value for all stakeholders across People, Planet and Profit, and ensuring all business groups and solutions ladder up to its commitment to contribute further to the UN Sustainable Development Goals.
The Waves of Change initiative addresses both strategy objectives and involves collecting and recycling nearly 2,000 tonnes of discarded fishing nets, also known as "ghost gear" from the sea each year. A supply chain located around the coast of India engages around 300 people in various activities such as collection of fish nets, cleaning, handling, cutting, washing and packing before the material is compounded at DSM's plant in Pune. The result is a unique, repurposed resin containing recycled polyamide 6 at a maximum of 70 per cent of the composition which is reinforced with fibre glass to make key surfboard components.
Importantly, the upcycled material is cost competitive and outperforms newly-manufactured plastic. Response from surfer communities has been immediate and positive, encouraging Starboard to have all plastic components in the surfboards made with the same material.
'NOTHING IS WASTE UNTIL IT'S WASTED'
In a study by consulting firm Bain & Co involving 297 global firms released earlier this year, 81 per cent said sustainability is more important to their business today than it was five years ago. Experts said this global trend of companies making sustainability a bigger part of their business is also reflected in Singapore.
More opportunities for circular innovation are also emerging at home. Speaking at the St Gallen Symposium 2019 Singapore Forum, Temasek Holdings CEO Ho Ching stated that businesses must fulfil their obligation to ensure a liveable and sustainable planet besides pursuing financial returns.
Panellists at the CleanEnviro Summit Singapore 2018 engaged in conversation around market opportunities for businesses that dare to be creative and exploit high-tech developments to create smart waste collection systems, a gap as yet unfilled in Singapore and cities across Southeast Asia.
The Singapore government is also behind sustained efforts to encourage research and development in this area. In 2017, the National Environment Agency (NEA) announced its Closing the Waste Loop Initiative, a programme that funds collaborations between industry and research institutes to develop waste management solutions, including recovering value from waste streams like plastics, food and electrical products. More recently, Masagos Zulkifli, Minister for the Environment and Water Resources, has laid renewed emphasis on Singapore's Zero Waste Nation campaign, declaring: 'Nothing is waste until it's wasted.'
The policy framework is also supportive, with the Singapore government behind sustained efforts to encourage research and development in this area.
With the strength of government support and increasing consumer expectations, first-movers in Singapore are well placed to capitalise on the commercial advantages of embracing circular supply chains. It is an opportunity not to be missed.
- The writer is commercial director, Asia-Pacific, at DSM Engineering Plastics