Governments will need to think about how to have smarter regulations that do not stifle business innovation, while firms should ensure that society and the economy continue to grow in a responsible way.
This two-way approach will help ensure a more sustainable future by contributing to "a globalisation that works for the benefit of all", said National Development Minister Lawrence Wong yesterday.
He told the Responsible Business Forum that much of the Asia-Pacific, including Singapore, has benefited from an open, globalised system since World War II.
"The question now is whether we can manage the stresses associated with globalisation, and work at improving the system and spreading the benefits of globalisation widely among the population."
Mr Wong, who is also Second Minister for Finance, noted that recent scandals like Volkswagen cheating in emissions tests and Wells Fargo bank opening up to two million accounts without authorisation from customers have eroded trust in institutions, with some calling for tighter business regulation.
"All regulations start with good intentions," Mr Wong noted, "but they can have unintended consequences. For every new rule that is created, companies will change their behaviours to (work) around the new regulations."
Citing financial regulation, he said the expansion of the first Basel Accord, an international agreement to regulate banks and prevent financial crisis, led to "more complex financial engineering, with banks all trying to produce what looked like safe investments created on the back of highly risky sub-prime mortgage lending, and we know the outcome of that".
"So there is a need to have more balance... Governments will need to think about how to have smarter regulations - rules that are effective, that mitigate market failures and at the same time do not stifle genuine business innovation.
"Businesses must also do their part... It is about how you align your business outcomes with broader sustainable development goals."
The Responsible Business Forum on Sustainable Development, at Marina Bay Sands until today, is Asia's first "zero-waste" and "zero-emission" large-scale conference.