Speech by Deputy Prime Minister and Coordinating Minister for Economic Policies Heng Swee Keat at the Launch of the Sustainability Innovation Lab on 20 November 2023.
Mr Jack Ehnes, Chairman of the Board, Global Reporting Initiative or GRI,
Mr Emmanuel Faber, Chairman, International Sustainability Standards Board or ISSB,
Mr Eelco van der Enden, Chief Executive Officer, GRI,
Ladies and gentlemen,
Good afternoon. I am delighted to join the GRI, ISSB and your various partners at the launch of this new Sustainability Innovation Lab today.
Let me first commend GRI and the International Financial Reporting Standards Foundation, of which ISSB is a part, for building this first-of-its-kind partnership.
This Sustainability Innovation Lab will serve as a launchpad to amplify GRI and ISSB’s innovation efforts in strengthening and advancing sustainability reporting in Asia and beyond.
Importantly, the lab will enable companies to meet evolving sustainability disclosure requirements. It will do so by fostering professional development and training, promoting practical supply chain solutions and innovative thinking.
By finding common cause and bringing together other stakeholders from the public and private sectors, this platform will enhance the reach and positive impact of both GRI and ISSB as well-regarded standard-setters for corporate sustainability reporting globally.
It also sends a strong signal on the power of collaboration.
By building a cross-sectoral coalition of like-minded partners – we can more effectively tackle complex and evolving global challenges.
And there are few global challenges as salient as building a greener, more sustainable future.
Countries around the world, regardless of size, geography or wealth, are all feeling the impact of climate change.
For small island states like Singapore, this is a particularly existential issue.
We are gathered here today at Republic Plaza. If you look out the window, you can see how close Singapore’s coastline is to our Central Business District and downtown area.
Like many island nations, we are very vulnerable to rising sea levels, which is one of the phenomena that is accelerated by climate change.
But no one country, company or organisation can effectively tackle climate change alone. To do this well, we need deep, focused, and sustained collaboration across borders, sectors and domains.
Even amid their ongoing geopolitical contestation, the US and China – the world’s two largest economies and greenhouse gas emitters – recognise that they must cooperate with one another to tackle the climate challenge.
Last week, they issued a joint statement reaffirming their commitment to working jointly, and with other countries, to address the climate crisis, including in areas such as renewable energy. It is encouraging that the two largest economies are playing this much-needed leadership role.
Alongside governments, the private sector must also be empowered to play its part in shifting the world onto a more sustainable journey.
Hence, the launch of this Sustainability Innovation Lab, with a focus on Asia, is especially timely and appropriate.
Timely, because we all recognise that much more needs to be done, with a greater sense of urgency, to raise the level of climate action globally.
A UN report last year found that current policies are likely to bring the world towards a 2.8-degree Celsius temperature rise by the end of the century.
To achieve the 1.5-degree Celsius goal that countries committed to in the Paris Agreement, we need to reduce global greenhouse gas emissions by 43% by 2030. This is a major task.
It is also appropriate that this Sustainability Innovation Lab is launched with an immediate focus on Asia, as Asia is expected to account for large proportion of global economic growth in the coming years.
The International Monetary Fund projects that developing economies in Asia will grow by 5.2% and 4.8% in 2023 and 2024, higher than global growth projections of 3% and 2.9% respectively.
But Asia must grow in a responsible way – one that balances short-to-medium term progress with the long-term well-being of our people and the planet.
It is in our own interests as a region to grow sustainably, for the continued prosperity of the generations who succeed us.
Take ASEAN, for example. The Asian Development Bank estimates that climate change, if left unchecked, could shrink the region’s economy by 11 percent by 2100.
So even as we accelerate our growth and development here in Asia, we must ensure that this does not exact a high price on the environment, which will in turn, undermine our future.
Given Asia’s growing centrality to the world economy, a successful green transition in Asia will contribute much to global progress in combating climate change.
Asia’s economic and social development aspirations should not be seen in zero-sum competition with our decarbonisation ambitions.
As Chairman Ehnes mentioned in his remarks earlier, best practices emerging from Asia can serve as pathfinders for the rest of the world.
Two drivers, in particular, will be critical to building Asia’s path to a more sustainable future. These are technology and innovation, and finance.
Innovation and technological breakthroughs will be critical to scaling up the development and deployment of renewable energy and many other sustainability solutions to meet the region’s growing needs in a sustainable and cost-effective manner.
Interest and investment into new green technologies have grown considerably around the world.
Both established companies and exciting new start-ups are working on breakthroughs in clean energy, low-carbon agriculture, and greater circularity to reduce and optimise waste.
In Singapore, we have committed about S$25 billion, or around 1% of our GDP, to strengthen our research, innovation and enterprise capabilities between 2021 and 2025.
This includes research into Urban Solutions and Sustainability, to help enhance Singapore’s resilience, liveability and sustainability.
As part of this, we are ramping up efforts to develop innovative technological solutions that can support decarbonisation in the real economy and scale up renewable energy.
For example, we are studying how to best harness emergent technologies like hydrogen and carbon capture, utilisation and storage.
We are also working with sustainability solutions providers like Aon and Schneider Electric, as well as consultancies like PriceWaterHouse Coopers and the Boston Consulting Group, to anchor Centres of Excellence in Singapore to pursue climate innovation at scale and develop new solutions for their regional and global clients.
Complementing this pursuit of innovation and breakthroughs is the second driver, namely, finance.
Significant cross-border private capital flows will be needed to finance an inclusive and impactful green transition in ASEAN.
It is estimated that ASEAN economies will need US$3.1 trillion of infrastructure investment from 2023 to 2030 to sustain economic growth, reduce poverty and respond to climate change.
Capital must be channelled in an optimal way to unlock innovation and spur new sustainability breakthroughs.
As a regional green finance hub, Singapore supports efforts to mobilise financing for Asia’s net zero transition and regional decarbonisation activities.
In April this year, the Monetary Authority of Singapore launched a Finance for Net Zero (FiNZ) Action Plan laying out Singapore’s strategies to support sustainable finance in Asia.
A key plank in mobilising such sustainable finance is a relevant and credible reporting framework.
Data and disclosures are essential to support capital allocation decisions while safeguarding against greenwashing.
MAS has therefore made consistent, comparable and reliable sustainability data and disclosures a core strategy under the Finance for Net Zero Action Plan.
Our listed entities have had to publish sustainability reports since 2017. We are looking to extend this to the broader economy in a phased and proportionate manner.
Establishing a credible reporting framework for data and disclosures will require collaboration across public and private sectors.
Leveraging technology to support growth in the global sustainability data landscape, MAS launched Gprnt, an integrated digital platform, at the Singapore Fintech Festival last week.
Gprnt allows businesses to automatically convert their economic data into sustainability-related information.
In so doing, it tackles challenges faced by the financial sector and real economy in collecting and accessing trusted sustainability and climate-related data.
Gprnt also functions as a central launchpad for the Environmental and Social Governance, or ESG data and FinTech community to innovate new products and enhance existing capabilities.
In turn, as the demand for sustainability reporting picks up in tandem with the region’s net-zero goals, we must address key market needs in this area.
This is where platforms like this new Sustainability Innovation Lab play an important role.
I am pleased to hear that the lab will focus on four areas initially – digital taxonomies, audit and assurance, smaller enterprises, and public sector reporting.
Let me briefly outline the value-add that platforms like the Sustainability Innovation Lab can bring to the regional reporting and disclosure landscape. I shall distil it into 3 Cs.
First, compatibility between the different types of sustainability reporting that meet the needs of different stakeholders.
Over 80% of listed companies in Asia-Pacific currently report with GRI Standards. At the same time, many jurisdictions are now considering adoption of ISSB Standards, which provide a global framework for sustainability disclosures to fulfil the information needs of shareholders in particular.
Supporting harmonisation of the two reporting standards will streamline sustainability reporting for corporations that report on a multi-stakeholder basis.
The Sustainability Innovation Lab can provide a collaborative platform to research possible guidance for organisations on how they can report using both GRI and ISSB Standards to meet multi-stakeholder needs.
Second, confidence in sustainability reporting.
Reporting entities need to have confidence to report on critical climate-related disclosures without fear of undue legal liability, as they may have to rely on third-party information beyond their control.
At the same time, investors need to have confidence in the integrity of the sustainability disclosures they are using to make capital allocation decisions.
This new Sustainability Innovation Lab can tap on the deep expertise in Singapore’s modern services ecosystem and create pathfinders to enhance sustainability assurance capabilities that help build confidence in climate-related reporting, data and disclosures.
And third, capacity for credible and consistent reporting that can accelerate the net-zero transition.
For a successful transition, capacity-building throughout the entire economy is important. All parts of the economy have a part to play.
Organisations of all sizes, public and private, will have to equip themselves with the right tools and capabilities to address calls and expectations for more accountability and transparency in sustainability disclosures.
Professionals will also have to stay up-to-date and relevant to provide the right support to the entire sustainability disclosure ecosystem.
To this end, the lab can support stakeholders and all market participants along their sustainability reporting journey with training and practical guidance.
This new Sustainability Innovation Lab is therefore a welcome addition to support development of the sustainability reporting ecosystem regionally and beyond, and to find innovative ways of doing so.
As a Global-Asia node of technology, innovation and enterprise, Singapore is happy to host the lab and welcomes the opportunity to collaborate with GRI, ISSB and other partners on initiatives like these that can catalyse positive regional impact.
Innovative solutions are needed to scale decarbonisation technology and renewable energy capacity, as well as to tackle the challenges in sustainability data and disclosures to support capital allocation to accelerate Asia’s green transition.
This Sustainability Innovation Lab has great potential to contribute to our sustainability ecosystem through its collaborative approach aimed at practical guidance and innovative solutions.
In conclusion, congratulations once again to both GRI and the IFRS Foundation on this important partnership.
I wish the Sustainability Innovation Lab great success in advancing sustainability reporting in the region and beyond! Thank you.
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