The widespread adoption by the corporate sector of sustainable practices will not come automatically, or quickly enough, if this is left entirely to market forces, said Deputy Prime Minister and Coordinating Minister for Economic and Social Policies Tharman Shanmugaratnam last night.
The companies that have moved beyond the rhetoric of sustainability, to actually alter business models and practices, are in the minority everywhere in the world, he pointed out.
There are two realities to contend with in virtually all economies, he said. One is short-termism - the trade-off between short-term returns, which drive many shareholder decisions, and long-term impact. The second is the trade-off between shareholder returns and those of all stakeholders in society.
"If we wait for markets to provide the incentives, we will lose a critical window of opportunity to address the looming challenges of climate change, depletion of natural resources and loss of biodiversity - all of which will threaten the next generation.
"This is why governments and regulatory bodies need to step in to implement policies that will incentivise sustainable practices; why all countries have to move together; and why there is a critical role for collective leadership through international and multilateral organisations."
Measures by the Singapore Government include introducing a carbon tax, regularly enhancing vehicular emissions standards, providing grants to help businesses become more sustainable, and support for partnerships between universities and research institutions and private players, to test bed and pilot efficient urban solutions.
Relying solely on government and regulators' actions to achieve sustainability, however, will lead to more onerous requirements on businesses, said DPM Tharman.
That is why it is far better for businesses to also take the initiative to craft sustainable strategies that yield long-term returns; and for governments, businesses and citizens to work together to achieve sustainability, he said.
Corporate leaders, the Global Compact Network Singapore (GCNS), which is the national lead agency promoting corporate sustainability, and the Carbon Pricing Leadership Coalition play key roles in demonstrating the viability of sustainable business practices, and in providing businesses with useful platforms to share experiences and collaborate on corporate sustainability, he added.
Yesterday, the winners of the Singapore Apex Corporate Sustainability Awards, organised by GCNS, were recognised for their leading efforts in making sustainability an integral part of their operations, at an event at the Conrad Centennial Singapore.
Those awarded for sustainable businesses were financial services group DBS Group Holdings, palm oil giant Golden Agri-Resources, tissue and personal care product producer Kimberly-Clark Asia Pacific, info-communications company StarHub and consumer goods giant Unilever Asia.
Sustenir Agriculture, a high-tech farming firm, and iWOW Technology, which provides smart metering and smart tracking solutions, were recognised for developing sustainable solutions.
In addition, Unilever Asia was specially recognised as the Sustainable Business Apex Winner, for having the most comprehensive sustainability policies across economic, environmental, social and governance considerations, GCNS said.