As awareness about the impact of human activity on climate grows, so too is the corporate appetite for services that help firms measure and cut their carbon footprint.
Over the past year, 13 international firms have anchored and expanded their carbon services offerings in Singapore, Trade and Industry Minister Gan Kim Yong said in Parliament last week.
They are among more than 70 organisations involved in carbon services and trading in Singapore, says a new report commissioned by economic agencies in Singapore.
Last February, amid the global green push to reduce reliance on fossil fuels, the Republic had identified in the Singapore Green Plan 2030 – the country’s blueprint for sustainable development – carbon services as an area of growth.
Carbon services refer to services that help firms reduce the amount of planet-warming gases, such as carbon dioxide, that they release.
These services include clean energy project development or financing, as well as consultancy, audit and certification services that help firms in their efforts to measure, reduce and manage emissions.
Carbon services also covers carbon offsetting. Companies may choose to buy a carbon credit from a renewable energy plant or a forestry restoration project developer elsewhere to “offset” their emissions.
This buying and selling of credits requires financial expertise, creating new roles for carbon brokers and traders.
New entrants to Singapore include firms such as Low Carbon Advisors, which “provide independent assessments of low-carbon strategies and... act as guides and sounding boards to chief executives, boards and corporate sustainability leaders”, said its managing director Laura Ashton.
She said the firm’s clients are primarily boards and C-level executives of multinational corporations and conglomerates, so the presence of many company headquarters and other listed companies in Singapore was a major factor in the firm choosing to establish itself here.
She added: “Singapore is an attractive place for new businesses... with a vibrant start-up ecosystem, frictionless administration, helpful financial incentives and transparent tax and legal system.”
The report by sustainability consultancies South Pole, Vivid Economies and Engeco found that the carbon services sector could create a projected gross value added of between US$1.8 billion (S$2.4 billion) and US$5.6 billion in Singapore by 2050. Gross value added measures the contribution made by a sector to the economy.
Mr Damian Chan, executive vice-president of the Economic Development Board (EDB), told The Straits Times: “EDB and Enterprise Singapore are actively growing the ecosystem of carbon services and trading firms by partnering with existing firms and helping new potential entrants to expand their capabilities in Singapore and the region.”
He said the largest source of growth within the carbon services sector in Singapore will come from financial services, financial intermediation such as brokering and trading services, and legal services. “Singapore has existing strong fundamentals in these areas, due to our long-standing position as a regional hub for commodity trading, financial services and legal services,” he told ST in an e-mail earlier this month.
But the country could also offer a range of other carbon services, including in terms of emissions measurement, reporting and verification, advisory services, and carbon project development, he added.
Meanwhile, existing firms are also expanding in this area, with the likes of professional services company PwC launching its Asia Pacific Centre for Sustainability Excellence last year.
Ms Fang Eu-Lin, environmental, social and governance (ESG) leader at PwC Singapore, said the firm opened its centre for sustainability excellence here to leverage the country’s strong climate ambition underlined by the Singapore Green Plan 2030, which marks the city state’s progressive sustainability journey and its growing prominence as a regional sustainability hub.
“Singapore is also the headquarters location to many international companies that share strong ESG ambitions,” she added.
“Coupled with Singapore’s close connectivity with economies across the Asia-Pacific region, these are key ingredients of an ecosystem where ESG capabilities and ideas can flourish,” she said.
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