The current climate crisis is a hot topic globally. We are reminded of it daily, and it is hard to deny the obvious global threats of rising sea levels, temperatures, and biodiversity loss. These issues also impact other areas, such as increased fuel and groceries costs.
Increased investment in industries working towards the UN Sustainable Development Goals (SDGs) is becoming a feature of Southeast Asia business trends. This move toward impact investment further highlights the urgent need for cooperation between governments, regulators, consumers, investors, financial institutions, and the real economy to ensure a sustainable future.
Singapore has always had a strong economy and is home to the Asia-Pacific arm of the Glasgow Financial Alliance for Net Zero (GFANZ). GFANZ is a global coalition of leading financial institutions working towards bridging the gap between international investors’ net zero concerns and the actual needs of Southeast Asia.
What is climate backsliding, and why should businesses in Southeast Asia care?
Singapore plays a pivotal role in setting the region’s business trends. Therefore, much of the burden of delivering a sustainable economic landscape in ASEAN is in its hands.
Current Southeast Asia business trends
Digitalisation and data flows are considered the most significant trends affecting global forces and networks across Southeast Asia in the post-pandemic era. In the past, governments, large MNCs, and international financial institutions controlled trade flows. But the COVID-19 crisis dramatically changed the global economy. Advancements in digital technologies and innovative platforms have ameliorated the cost and ability for businesses to grow internationally.
As a result, even small-scale businesses and individual entrepreneurs can compete equally in the new style of the international economy. A McKinsey & Company survey shows that over 85% of tech-based startups report some kind of cross-border activity.
Singapore was one of the first countries in the region to catch this digital wave, despite being one of ASEAN’s smallest countries in terms of land mass, population, and economy. Complexity arises during the policy-making process due to digital globalisation, which poses a significant shift in value chains, the emergence of new hubs, and transformations in economic activities. All of this is moving toward an ultimate outcome: a sustainable future economy.
Impact of climate change on Singapore
The annual mean temperature in Singapore has risen from 26.9°C to 28.0°C from 1980 to 2020. Research also shows that the mean sea level in the straits of Singapore has climbed at the rate of 1.2mm to 1.7mm annually from 1975 to 2009.
Rainfall has become more extreme in Singapore recently, increasing at a rate of 67 mm per decade from 1980 to 2019. Typhoon Vamei, the first recorded cyclone near the equator, swept Singapore’s north side, causing problematic flooding in the region in 2001.
Water resources are another element being damaged by climate change in Singapore since it poses a significant challenge to managing the country’s water reservoir. Singapore’s water supply is under substantial threat because of the impact of periodic droughts.
The impact of the climate crisis on Singapore’s public health is also substantial since the country is in a region where vector-borne diseases are endemic. Most cases of vector-borne diseases like dengue occur during warmer periods of the year. Additionally, instantly severe hot weather can cause a multitude of heat stress and discomfort among the elderly and sick.
Action in Singapore
As the region’s financial hub, it is unsurprising that Singapore is leading the way in financing Southeast Asia’s net zero transition. The exponential growth of the country’s green or eco-friendly financial ecosystem substantiates the priorities of key stakeholders in Singapore. The low-carbon economy or decarbonisation is potentially a generation-defining business opportunity, not just for managing environmental risk efforts.
Since 2009, Singapore has been working towards achieving its commitment to reduce emissions by 16% from business-as-usual (BAU) levels by 2020. Six years later, the country has pledged to minimise Emission Intensity (EI) — the amount of GHGs emitted per dollar GDP– by 36% from the 2005 benchmark by the end of 2030. It is also working to alleviate emissions to peak around 2030.
In 2020, Singapore submitted enhanced Nationally Determined Contribution (NDC) and Long-Term Low-Emissions Development Strategy (LEDS) documents to the UNFCCC. Additionally, as a member of GFANZ, the country contributes to shaping regional net zero sectoral pathways and facilitates the process of establishing standards and taxonomies for foreign investors.
The Inter-Ministerial Committee on Climate Change (IMCCC) has also confirmed Singapore’s adoption of a coordinated approach towards climate change, and NEA enthusiastically supports the tactical outputs of the various IMCCC working groups in the effort of combating the global climate crisis. This news is incredibly favourable for Singapore in terms of leading the Southeast Asia business trends towards its mission of securing a sustainable future for all human beings.