ENVIRONMENTAL sustainability has become a top global agenda in recent years. Governments are looking to enact policies and strengthen their mitigation measures for climate change even as they continue to drive economic development.

This growing momentum towards sustainability is particularly important in Singapore and the rest of South-east Asia, where the impact of climate change is expected to rapidly intensify.

Launched last year, the Singapore Green Plan 2030 lays out a national road map towards sustainable development and net-zero emissions.

With countries transiting towards a low-carbon future, the pressure to transform will in turn impact the industry level. Businesses face heightened pressure from customers, investors, employees, regulators and other stakeholders, to adopt sustainable practices and integrate sustainability into their business strategies and operations.

Innovation key to solving sustainability challenges

The global demand for green solutions is expected to grow, presenting new business opportunities for startups, enterprises and corporates alike to build competitive advantages, innovate, and develop new green and sustainable solutions.

As a key hub in Asia, Singapore is well placed to support these sustainability efforts. We offer international partners and companies a suitable base from which to plug into the sustainability needs of the region, to innovate, and scale up.

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There are various initiatives in place to drive this. The government’s Research, Innovation and Enterprise 2025 plan supports the development and commercialisation of innovative solutions in areas such as clean and renewable energy, circular economy, and low-carbon solutions.

Last year, Enterprise Singapore (EnterpriseSG) introduced a S$180 million Enterprise Sustainability Programme (ESP) to support companies to incorporate sustainability across their business operations and build capabilities in areas such as resource optimisation and standards adoption. Innovative businesses looking to develop products and services to address our climate and sustainability challenges can also leverage this.

Green finance as an enabling tool

With significant financing and investments needed to enable the green transition and decarbonise the global economy, the demand for green financing will only continue to rise. A recent report by Bain and Temasek on South-east Asia’s green economy indicates that the demand for green finance in the region is set to reach more than US$3 trillion by 2030.

Access to such financing will enable enterprises to capture emerging opportunities in the green economy, such as to conduct research and development activities and eventually commercialise new innovative solutions.

Crucially, for businesses seeking to obtain green loans or investments, demonstrating their environmental, social and governance efforts will allow them to raise the chances of unlocking capital from a wider pool of financiers who are aligned with their sustainability goals.

The good news is that the banks and investors here are also placing greater emphasis on sustainability projects, integrating sustainability into their loan and investment evaluation frameworks and processes.

Financial providers, including commercial banks, multilateral development banks and impact investors, are taking measures to provide clarity on the requirements to qualify for green financing, including relevant green standards or certifications.

The Monetary Authority of Singapore (MAS) also established the Green Finance Industry Taskforce to develop a taxonomy that aims to set out clear definitions and criteria about what activities can be considered green, or in transition towards green. This provides a common language required to provide clarity and confidence to financiers for green projects.

Increasing access to green financing

Various government agencies have stepped up efforts to enhance enterprises’ access to green financing.

For example, the MAS offers grant schemes that defray the incremental costs of corporates taking up green and sustainable bonds and loans.

Alongside the ESP, EnterpriseSG launched the Enterprise Financing Scheme – Green (EFS-Green) last October to enable small and medium-sized enterprises (SMEs) to better access green financing and support the development of technologies and solutions to reduce waste, resource use and greenhouse-gas emissions.

By providing a 70 per cent risk-share, EFS-Green aims to catalyse lending from our partner financial institutions – DBS, UOB, OCBC, HSBC and CIMB – to SMEs in sectors such as clean energy, circular economy, green infrastructure and clean transportation. This has seen good response since the launch of the scheme.

Close to S$100 million in green loans has been catalysed for more than 30 SMEs, spanning areas in solar energy, energy storage, energy efficiency technologies, electric-vehicle technologies, green maritime solutions, green construction technologies, as well as recycling, re-utilisation, remanufacturing and refurbishing of materials and waste.

Through a green loan by DBS, solar energy developer Novasix was able to capture new opportunities by developing the SolarNova Phase 6 Project with the Housing & Development Board (HDB).

It will deploy solar panels across close to 1,200 HDB blocks and 60 government sites. With a solar capacity of 70 megawatt-peak, the project will accelerate the deployment of solar photovoltaic systems in Singapore, contributing to the nation’s efforts to develop smart estates by harnessing green energy.

Some local enterprises have tapped EFS-Green to scale their innovative green technologies abroad. An example is sustainability artificial-intelligence (AI) company Evercomm Singapore, which designs and provides innovative AI-driven Asset Performance Management solutions.

Its Internet-of-Things devices help buildings and infrastructure assets assess and track energy use to improve their energy consumption and operational efficiency. The company received an EFS-Green loan from OCBC, which will enable it to scale up its hardware deployment to capture demand in regional markets such as Malaysia and Thailand.

Riding on the growing global demand for green solutions, there is no better time for enterprises to step up and harness green financing to push the boundaries of innovation.

This in turn will accelerate the industries’ adoption of green solutions and technologies to solve their sustainability challenges and bring us closer towards our climate goals and a low-carbon future.

The writer is assistant chief executive officer, Enterprise Singapore. He oversees the Urban Solutions, Sustainability & Enterprise Finance portfolios.