S’pore’s readiness for dealing with climate impacts will guide business investments here: Grace Fu

SINGAPORE – A country’s readiness to adapt to climate calamities has become an increasingly important consideration for businesses looking to invest in Singapore, said Minister for Sustainability and the Environment Grace Fu.

Speaking to the media on Nov 3 ahead of the 30th UN Climate Change Conference of the Parties (COP30) – which will take place over two weeks in Brazil from Nov 10 – Ms Fu said that businesses are beginning to take stock of “the adaptive ability of a country” to plan for climate risks before deciding to invest in an area.

“Climate risk is very much ingrained in investors’ mindsets, and we have seen many banks, many investors incorporating climate risk into their calculations, into their planning,” she said.

Adaptation refers to actions that can deal with the damage caused by climate change.

The other prong of climate action is mitigation, which tackles human-driven climate change by absorbing or limiting the production of planet-warming greenhouse gases.

Adaptation is expected to be a key focus of the climate talks in the

Amazonian coastal city of Belem.

Negotiators are expected to agree on a set of indicators that countries can use to develop national adaptation plans and track progress on their implementation.

Ms Fu will represent Singapore at the annual summit, where governments are set to negotiate their joint efforts to curb climate change and deal with its impacts.

She is set to fly to Brazil for the second week of talks.

The upcoming event marks a decade since nearly 200 countries adopted the Paris Agreement in 2015. The treaty outlines their commitment to working towards capping global temperature increases to 1.5 deg C above pre-industrial levels, a threshold that can ward off more severe climate impacts.

The Republic also takes the same approach in looking at the preparedness of a country or community against climate change, before deciding where to “activate finance for climate action”, said Ms Fu, who is also the Minister-in-charge of Trade Relations.

Under the Paris Agreement, developed countries are obligated to provide climate finance for developing countries.

Singapore, classified by the UN as a developing country, is not obliged to contribute to climate finance, but has helped to channel funds into climate-friendly initiatives in other countries from various sources, including investors and philanthropies.

Ms Fu cited preparatory plans, such as a country’s efforts to ensure a sustainable water supply or deal with the impact of warming temperatures, as being key to boosting investor confidence.

“We need to set a certain baseline that investors have the confidence that a local community has its plan throughout,” she said. “The plan needs to be comprehensive and future-ready before the capital can go in.”

This comes as the fingerprints of human-driven climate change continue to be felt in 2025, with extreme heat, wildfires and other climate-related disasters ravaging the world.

Last week, Hurricane Melissa – one of the most powerful storms in history – that devastated Jamaica was found to have been made

four times more likely

by climate change.

Despite having the time and experience to prepare for the storm, the Caribbean island nation suffered damage that cost the equivalent of about 30 per cent of its gross domestic product in 2024.

With losses arising from climate change mounting every year, it is in the interest of the whole world to avoid postponing a decision on the global effort to enhance adaptive capacity, strengthen resilience and reduce vulnerability to climate change, said Ms Fu.

She added: “The faster we are able to get it done, the more we are able to avert calamity.”

Singapore is also looking to help develop new financial instruments and adaptation solutions for fellow small island states, she said.

Its approach to planning for coastal protection could offer some insights to others on how adaptation efforts can be financed.

In protecting an area against rising sea levels by building sea walls, for instance, there could also be complementary discussions on whether other efforts, such as creating a reservoir for fresh water, can be made concurrently.

That way, the fresh water supply can be monetised, Ms Fu said.

“So we have to think creatively out of the box.”

At COP30, leaders are also expected to discuss how to increase climate finance to developing nations.

At COP29, rich countries agreed to channel US$300 billion (S$392 billion) annually to poorer nations – an increase from the original target of US$100 billion.

But at the upcoming summit, the plan is to see how this quantum can be raised to US$1.3 trillion from governments and other sectors, such as private companies.

Ms Fu stressed Singapore’s support for the multilateral process, as the conference marks “the only game in town with all the parties signed on with a commitment”.

However, casting a pall over the process is the United States, which, under President Donald Trump, will by January 2026 formally withdraw from the Paris Agreement.

But Ms Fu said there will be “strong momentum” from Singapore and other like-minded countries at the two-week meeting to put the climate action process back on track.

She likened the US to a student who has left a class and told his peers that “studying is not a good idea”.

She said: “So how do we ensure that remaining students in the class will continue to attend, continue to pay attention and continue to work together?

“You need to have alternative leadership that’s providing that pathway.”

The Brazilian presidency has billed it as an “implementation” conference, where the parties will focus on delivering their commitments in climate action plans.

In the same spirit, Ms Fu said she plans to focus on helping countries put into practice agreed outcomes and raise interest in adopting solutions.

For instance, the rules governing the international trade in carbon credits, which allow nations to cooperate with one another to achieve their climate targets, have already been finalised at COP29.

To date, Singapore has signed pacts with 10 countries, paving the way for the resource-strapped Republic to purchase credits from foreign projects that absorb or limit carbon emissions, to offset its carbon footprint.

A seasoned co-facilitator at previous COP meetings, the minister

has helped global negotiations

on the rules of global carbon markets reach a consensus in the Azerbaijan capital of Baku, Sharm el-Sheikh in Egypt, and Glasgow.

With momentum at risk of slipping due to political and economic headwinds, the world will have to work harder to find opportunities for collaboration, said Ms Fu.

She added: “I intend to spend more of my time this time around having more discussions with my counterparts and also looking at collaborative projects.”

At the Singapore pavilion, Ms Fu said, the Republic will showcase the progress it has made on its solutions like the Asean power grid for the country to tap the renewable energy of its neighbours, as well as on carbon credits.

As part of the Republic’s team, 12 young people will also be fielded to take part in the global climate meeting. Ms Fu said the experience is meant to help these leaders of the future understand the needs, challenges and constraints of other parties in order to determine what needs to be done to drive inclusive climate action.

“This is an international process, that if you are not present at the meeting, you are allowing decision to be imposed on,” she said. “So I think it’s important for us to have Singapore’s voices represented in the process, and where possible, we will also want to help shape decisions.”