KPMG, SID call for support for businesses to go green, strengthen workforce capabilities
Other proposals include developing artificial intelligence governance and standards, as well as introducing enhanced tax governance practices
PROVIDING more transparency on how carbon tax revenues are used for green infrastructure, as well as introducing leadership benchmarks to strengthen workforce capabilities, are among some recommendations proposed by KPMG in Singapore and the Singapore Institute of Directors (SID) in a joint Budget 2025 wish list.
Their recommendations, which were unveiled at a media conference on Wednesday (Jan 8), fall under three pillars: environmental, social and governance (ESG) and sustainability; human capital; and digital readiness and corporate governance.
“Our Budget 2025 recommendations are framed against the backdrop of the growing challenges businesses face, driven by critical global trends,” said KPMG and SID.
Such trends include climate change and increasing regulatory reporting requirements; rising trade protectionism and geopolitical tensions that disrupt supply chains; as well as digital trust concerns arising from emerging technologies such as artificial intelligence (AI), both organisations noted.
ESG and sustainability
To support businesses in their green transitions, KPMG and SID said, the government can provide detailed disclosures on how carbon tax proceeds are used to support green infrastructure.
With greater clarity in public funding allocations, businesses can then re-organise their funding strategy and seek private collaborations if public funding is unavailable, they added.
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Another proposed measure was the development of a centralised ESG reporting hub. This will guide businesses in navigating ESG reporting requirements and adopting international sustainability standards.
Both organisations also suggested deploying incentives for blended finance transactions. This includes providing first-loss guarantees for large-scale sustainable projects or adaptation financing to support vulnerable low-income groups.
Human capital
To uplift Singapore’s workforce and develop human capital, both KPMG and SID suggested establishing a National Leadership Competency Index to support organisations in growing their pipeline of leadership talent.
The index will provide a standardised metric for tracking leadership performance across industries, thereby helping companies to foster leadership that can drive local and global growth.
Ajay Sanganeria, partner and head of tax at KPMG in Singapore, said businesses need to develop stronger leadership to navigate today’s challenges, which have become more “multi-dimensional and complex”.
Having a publicly available leadership benchmark for companies to refer to will allow for more consistency in the development of requisite leadership competencies across the board, he added.
KPMG and SID also proposed for the government to expand investments in micro-credentialling and create a funding mechanism for workforce upskilling.
Short-term certifications in “high-demand” areas such as artificial intelligence, sustainability and cybersecurity will help to address immediate skills gaps, they noted. Meanwhile, providing tax incentives and grants to businesses will encourage them to sponsor upskilling programmes.
Digital readiness and corporate governance
With Singapore being one of the world’s most digitally advanced economies, KPMG and SID also highlighted the need for businesses in the Republic to keep pace with enterprise innovation and digital transformation.
This is especially given the “technical complexity” of AI algorithms and evolution of AI technologies, which make continuous updates to governance frameworks and policies challenging.
They proposed increasing funding for the development of AI governance and standards, which will help to provide businesses with the “necessary assurance” to invest in AI technologies.
This is because uncertainty surrounding AI integration and regulation can hold companies back from adopting such technologies, they noted, due to concerns over reputational and financial risks.
Another suggestion was to help company directors develop the necessary skills to navigate ESG issues and develop innovative business strategies.
SID chief executive Terence Quek said: “By fostering a culture of sustainability and innovation, directors can ensure long-term value creation, driving both responsible growth and competitive advantage.”
In addition, KPMG and SID proposed introducing enhanced tax governance practices to further strengthen Singapore’s corporate governance, especially for companies benefiting from tax incentives or grants.
Strengthening corporate governance will help to provide greater assurances of transparency to investors, in turn catalysing more investment in Singapore companies and trading in local exchanges, they said.
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