The sustainability transformation

EXPECTATIONS for businesses are changing. Today's businesses are under growing pressure to respond to demands from stakeholders to improve their sustainability performance. Business leaders need to take a more active role in tackling the sustainability agenda in order to protect their future business.

Regulators, investors and customers are demanding higher levels of sustainability from companies. An important shift motivating change in business behaviour has been the redirection of financial flows as investors, lenders, and insurers increasingly realise that sustainability risks generate financial risk.

The Monetary Authority of Singapore sees this, and is taking active steps to promote sustainable financing in the financial sector, including consulting financial institutions on proposed guidelines to enhance their resilience to and management of sustainability risks. The regulatory changes signal an important shift in financial flows. Investors, in a particular, are playing a central role in accelerating capital flows toward sustainable funds. In Singapore, over 80 per cent of asset managers are signatories of the United Nations Principles for Responsible Investment. Globally, businesses are feeling investor pressure. Deloitte's 2020 Climate Check survey found that 35 per cent of companies cited "pressure from our investors/shareholders" as a top factor for motivating the company's sustainability investments.