Published on: 06-Sep-2019
With increasing corporate and investor awareness of sustainability issues, demand for related expertise is growing, said industry players. And while there is still a reliance on consultants, larger corporates are expected to shift towards in-house teams.
Regulatory changes have played a key role. In 2016, sustainability reporting was introduced for Singapore Exchange-listed firms on a "comply or explain" basis.
With the new requirement, EY, which has offered sustainability services here since 2009, has seen a "steady increase in interest and demand" in the last two years, said partner for climate change and sustainability services Simon Yeo.
"In recent years, companies are also interested to find out more about their climate strategy - which includes carbon footprint accounting, greenhouse gas emissions verification and science-based target setting - as they become more conscious of climate-related risks and opportunities," added Mr Yeo.
"As Singapore transitions to a low-carbon economy, the needs of companies may evolve further to include carbon measurement, management, reduction and reporting," said Dr Ryal Wun, deputy executive director and legal director of Global Compact Network Singapore (GCNS), the local chapter of the United Nations
Global Compact for corporate sustainability.
With a carbon tax introduced in 2018, firms in heavy emissions sectors, such as oil and gas or waste management, "may seek new innovative solutions or independent assurance on their carbon footprint following the introduction of the carbon tax", said KPMG Singapore's head of sustainability services Ian Hong.
Given the high relevance of sustainability to them, firms in such sectors are likely to have strong technical in-house capabilities already, he said.
Also ahead of the curve is finance: "For the financial sector, there is huge investor pressure to ensure that climate risks are factored into financing and investing decisions."
Beyond these industries, awareness is rising more broadly.
"As investors and other stakeholders increasingly seek information and transparency from companies before making decisions, sustainability reporting looks set to grow in importance as an important part of a company's business strategy," said GCNS president Goh Swee Chen.
Yet firms whose core business is not closely tied to sustainability may not have in-house expertise. "Many organisations engage consultants to assist in the preparation of sustainability reports," notes Institute of Singapore Chartered Accountants (ISCA) executive officer Lee Fook Chiew.
SGX and GCNS have identified 12 firms to guide companies in sustainability reporting. These include professional services firms, corporate social responsibility specialists, and sustainability consultancies.
The SGX requirement has "precipitated an emerging number of players in the sustainability consultancy market", said GCNS executive director Esther Chang. "Such players vary in experience, quality and cost, depending on the needs of the business."
Firms could eventually develop their own capabilities. ISCA sees a role for accountants to support sustainability reporting, and for chief financial officers to drive such efforts.
Said HSBC Singapore chief executive officer Tony Cripps: "It varies by company and market, but the general trend we're seeing is an increasing demand for in-house sustainability teams. It is almost every company's goal to eventually build that capacity, and consultants are often brought in at the beginning to help."
Such expertise extends beyond reporting, with HSBC having seen more interest from corporate clients in sustainable financing options, he added. "As the demand for financing continues, the need for talent will also grow - not only within banks but amongst corporates themselves and amongst the services sector."
PwC Singapore sees a trend of firms tapping consultants for their first sustainability report, after which the in-house team "will then be able to refresh the sustainability report with less reliance from a consultant", said sustainability and climate change leader Fang Eu-Lin. She notes "a healthy pipeline of talent especially withthe younger workforce both in Singapore and overseas", with the younger generation showing particular concern for the environment and an interest in "purposeful work".
Said KPMG's Mr Hong: "The talent pool for sustainability services in Singapore is young but growing quickly, with an influx of foreign talents and Singapore universities incorporating sustainability modules into several of their main curriculums, both for undergraduates and postgraduates."
Nanyang Technological University's Nanyang Business School has various modules related to business sustainability, including an accounting course on sustainability issues, reporting, and finance.
The National University of Singapore has an elective module on managing for environmental business sustainability in its MBA programme. Singapore University of Social Sciences has a six-month graduate module in sustainability management.
This year, DBS Bank and Singapore Management University (SMU) started the DBS-SMU Sustainability Initiative, including the introduction of sustainability as a second major for SMU undergraduates.
Sustainability will be "increasingly woven into businesses", said Michelle Lee, associate dean for undergraduate programmes at SMU's Lee Kong Chian School of Business.
"There will be more jobs with titles such as 'sustainability officer', but there will also be jobs that require sustainability knowledge, though the word 'sustainability' may not be reflected in their titles."
There is also a growing number of resources that support firms in taking a do-it-yourself approach. GCNS offers an in-house sustainability reporting tool designed with "first-time reporters" in mind; while ISCA has developed "a practical guide", the Sustainability Reporting Implementation Roadmap.
August saw the launch of Singapore's first Maritime Sustainability Reporting Guide, a joint effort by GCNS, MPA, SGX, ISCA, and consultants from EY, KPMG and PwC Singapore.
On Tuesday, independent sustainability reporting organisation Global Reporting Initiative opened its Asean regional hub in Singapore, co-located in the GCNS office. The hub will support firms in Asean with services and training related to identifying, managing, and reporting ESG impacts.
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