SINGAPORE - The pursuit of green growth will entail hard decisions and trade-offs, but will open up new opportunities and help secure Singapore's long-term future, said Minister for Sustainability and the Environment Grace Fu.
"With more countries transiting to a low-carbon future, demand for products and services that meet sustainability criteria will rise over time. It is critical that our businesses get ahead of the curve and build capability early," she said at a conference with the Association of Chartered Certified Accountants (ACCA) on Tuesday (May 18).
Green financing is a key enabler of sustainable growth, she said.
Some $3.5 billion in green bonds was issued in Singapore last year, supporting initiatives in renewable energy, green buildings, and sustainable water and wastewater treatment.
At the same time, there is an urgent need to enhance market transparency and mitigate greenwashing, said Monetary Authority of Singapore (MAS) executive director Abigail Ng at the conference.
Greenwashing refers to firms putting out misleading claims about environmental practices or performance to seem more sustainable than they really are.
Ms Ng, who is also head of department for corporate finance and consumer, added that accountants are especially well placed to combat such issues.
The MAS has also been driving the Green Finance Action Plan, which includes a US$2 billion (S$2.7 billion) investment programme to finance green solutions and set up environmental risk management guidelines.
Ms Fu noted that Singapore is currently Asean's largest green finance market, accounting for close to 50 per cent of cumulative green bond and loan issuance in the region.
"As an international financial centre, Singapore will catalyse the flow of capital towards sustainable development, to support the transition to a low-carbon global economy," she said.
The business community has a key role to play in this push, Ms Fu said. While the public service will adopt environmental sustainability in its core functions, firms can take the lead in transforming business practices.
Firms can explore how digitalisation can help them in this drive for sustainability, as technology plays an instrumental role in the transition towards a low-carbon economy, she added.
"Use of data and fintech, artificial intelligence and Internet of Things can improve decision-making, optimise the use of resources, and reduce wastage."
Firms can also champion and push for adequate environmental, social and corporate governance (ESG) in their organisations, which can have long-lasting effects on sustainable practices, Ms Fu said.
"The decisions we make today in our post-pandemic recovery will determine if we can emerge stronger and be better placed to address the existential threat of climate change. If we execute our Green Plan well, with the support of the nation, we will make an important pivot towards a sustainable future."
The MAS' Ms Ng added that accountants can also encourage a mindset shift to help companies be more aware of the sustainability factors for business resilience.
"Financial statements today are actually not adequately reflecting the impact of sustainability factors on the financial position and performance of the corporate... Companies are reporting selectively against multiple different standards and frameworks," she said.
The MAS is working with the Singapore Exchange (SGX) to enhance the sustainability reporting requirements for issuers and incorporate global recommendations from the Task Force on Climate-related Financial Disclosures, an organisation that consists of 31 members from the Group of 20.
This can guide firms to make better climate-related financial disclosures, Ms Ng added.
The SGX intends to hold consultations on the proposed enhancements this year.
The ACCA will also explore a partnership with the National Parks Board in the drive towards greening Singapore.
It will also encourage its members, students and the larger business community to play an active role in initiatives such as NParks' OneMillionTrees movement, which aims to plant more trees in the next decade.