Singapore’s next economic reform – a green transformation

LAST week, several small and medium-sized enterprises (SMEs) told The Business Times that they see “no urgency” to tap a new Chief Sustainability Officer-as-a-Service programme by the Singapore Manufacturing Federation to help them reduce emissions. They cited resource constraints and the fact that their multinational clients had not asked them to report their carbon emissions.

It is clear that companies, left to their own devices, are not likely to make the extra effort to become more sustainable, and this may not entirely be their fault. A study by DBS last March found that only 37 per cent of SMEs have a clear road map on how to achieve their environmental, social and governance (ESG) goals, even if an overwhelming majority have some kind of “idea”, or perhaps intention, in mind.

Companies’ languid attitude towards sustainability brings to mind the early days of Singapore’s digitalisation drive, when many were hesitant or had no inkling of how to transform their businesses. But, there is a marked difference: a further delay to become more sustainable will invariably worsen the existential crisis of our day around unremitting emissions and climate change.

For the companies that had to play catch-up on digitalisation, Covid-19 was their much-needed wake-up call. Now the question is, how much worse does the climate and ecological disaster need to get before businesses will stop hitting the snooze button on sustainability? Time is not a luxury that we can afford.

About eight years ago, in a concerted effort to push companies to digitalise, the government launched a series of industry transformation maps (ITMs), which provided a structured pathway for firms to leverage Industry 4.0 technologies that could expand their capabilities beyond improving their productivity.

It was the trend at that point to describe the world as Vuca, short for volatility, uncertainty, complexity and ambiguity.

These days, the term has more or less fallen out of fashion, but the risks it sought to sound out no doubt live on – and have become ubiquitous assumptions for anyone trying to chart the future.

The biggest test came about in 2020, in the form of a once-in-a-century pandemic that gave rise to a contactless economy far more quickly than pundits had expected. But, not all businesses were caught off-guard. Those that had embarked on their digitalisation journey much earlier found themselves in a good place despite the disruptive shock. The government’s digitalisation push, as it turned out, was a fortuitous move.

Following the success of the ITMs, the government next rolled out a series of jobs transformation maps (JTMs) to prepare Singapore workers for the future economy. In the same vein, perhaps it would be timely for the government to consider introducing similarly detailed green transformation maps tailored for different industries, to guide and spur businesses, especially the smaller firms, to decarbonise.

Past economic reforms have typically required nationwide efforts, and the green cause should be no different.