Annabelle Yip and Rosabel Ng Business Times 18 May 11;
A BLUEPRINT for Singapore's sustainable development was unveiled in April 2009 by the Inter-Ministerial Committee for Sustainable Development. Titled 'A Lively and Liveable Singapore - Strategies for Sustainable Growth', it set out the key goals and initiatives covering the next 10 to 20 years.
Shortly after, the government and regulatory bodies launched various initiatives to encourage individuals and business sectors in Singapore to go green. Among the initiatives was the $100 million Green Mark incentive scheme for existing buildings by the Building and Construction Authority to incentivise commercial building owners to retrofit their buildings to improve energy efficiency.
There have been other initiatives by the Singapore authorities to promote sustainable development, and this article summarises some of the more recent regulatory developments across Singapore's green landscape.
On March 4, Minister for the Environment and Water Resources Yaacob Ibrahim announced in Parliament that the Green Vehicle Rebate (GVR) scheme, which was introduced in 2001, will be extended by another year for electric and petrol-electric hybrid vehicles. Accordingly, such vehicles will continue to enjoy rebates ranging from 10-40 per cent of their open market value until end-2012.
Electric and petrol-electric hybrid vehicles will also continue to be eligible to road tax pegged to that for petrol equivalents, which is 20 per cent lower than their diesel equivalents. However, the GVR scheme will cease to apply to compressed natural gas (CNG) and bi-fuel vehicles after 2011.
The government will also undertake a comprehensive review of the measures to promote the use of green vehicles in Singapore.
The Maritime and Port Authority of Singapore (MPA) then launched the Maritime Singapore Green Initiative on April 12. This comprises three different programmes. The Green Ship Programme aims to incentivise shipowners to provide energy-efficient ship designs that reduce fuel consumption and carbon dioxide emissions in excess of the requirements of the International Maritime Organisation's Energy Efficiency Design Index, which is a widely-used indicator of greenhouse gas emissions of ships.
The financial incentives under this programme comprise a 50 per cent reduction in the initial registration fees and a 20 per cent rebate on the annual tonnage tax payable.
The Green Port Programme seeks to encourage ships calling at the Port of Singapore to reduce emissions of pollutants. Qualifying ships must show that they are either using type-approved abatement or scrubber technology, or clean fuels with a low sulphur content exceeding the requirements of the International Convention for the Prevention of Pollution from Ships (Marpol), which stipulates that any ship operating within an emission control area must use fuel oil with a sulphur content not exceeding one per cent.
Under this programme, qualifying ships will receive a 15 per cent reduction of port dues payable.
The Green Technology Programme was set up to encourage local maritime companies to adopt green technologies. The MPA will be setting aside $25 million for the Maritime Innovation and Technology Fund, which will co-fund up to half the qualifying costs under this programme. The MPA will increase funding by an additional $25 million if this programme receives a favourable response.
In tandem with the other efforts to promote sustainable development in the public and private sectors here, the introduction of sustainability reporting and communications in the financial sector is also likely to take place soon to raise awareness among listed corporations (and those preparing for listing) and their stakeholders.
Public image
The Singapore Exchange (SGX) issued in August last year a consultation paper on a proposed policy statement and guide to sustainability reporting for listed companies. The draft policy statement sets out broad principles to guide issuers in formulating their sustainability reporting frameworks. The draft guide, which supplements the policy statement, sets out answers to frequently asked questions from listed companies on sustainability.
The consultation paper reflects a global trend of increasing importance. Increasingly, regulators, investors and the general public are scrutinising the extent to which broader sustainability concerns are addressed by companies in their day-to-day operational and investment decisions. In turn, companies are realising that it makes commercial sense to adopt responsible sustainability practices, especially since the investment community is placing greater value on such practices.
Apart from the public image boost, implementing sustainable practices can also help corporate bottom lines.
The pressure for corporate accountability of sustainable and environment-friendly practices is on the rise from various sources. Banks have incorporated potential environmental liabilities as part of lending risks when determining borrowers' requests for credit. Suppliers of goods and services are also being queried about their environmental and sustainability practices.
In turn, consumer perception of a company's environmental performance has become ever more important in maintaining market share. In this connection, various accreditation agencies and reporting guidelines have been established, such as ISO 26000 and the Global Reporting Initiative (GRI).
SGX, in its consultation paper, encourages companies to adopt the GRI framework in disclosing their sustainability performance.
With all this in mind, corporations should start considering what they need to do to monitor and improve their sustainability performance and how they report it.
Annabelle Yip is Joint Head - Corporate Governance and Compliance Practice, and Rosabel Ng is Joint Head - Environmental & Green Economy Practice; WongPartnership
