Good morning,
Ms Goh Swee Chen,
President of Global Compact Network Singapore,
Your Excellencies, Friends, Distinguished guests,
Ladies and Gentlemen

I thank Swee Chen for her kind invitation to be here.  I am also very mindful and very conscious that I’m among many experts who can speak to the topic more than I can.

I would like to start with a tribute to the NTUC, and its former Secretary General, Mr Lim Boon Heng.  They launched a tripartite initiative for Corporate Social Responsibility 15 years ago.  

The following year, in 2005, the Singapore National Employers Federation joined the NTUC, as founding members of the Singapore Compact for CSR.

Ten years later, NTUC showed again its larger ambition for a better world.  Soon after the ambitious UN Sustainable Development Goals for 2030 were adopted, NTUC brought together various Singapore CSR initiatives.  This included those with the Singapore Business Federation.  Thus was born the local chapter of the UN Global Compact, in 2015. 

Global Compact Network Singapore, or GCNS, is not just a farsighted brainchild of the NTUC, and its tripartite partners.  The GCNS also rests on the founding ideals of Singapore.

Back in the 1960s, our founding leaders were clear, as Swee Chen mentioned earlier. Singapore was not just about work, business, or the economy. It was ultimately, about better lives and a better future, for our people, and their families and children. 

We saw what industrialisation did to major cities in the developed world, some as late as into the 1980s – heavy smog and polluted waters, from Tokyo to New York, from LA to London. 

We were determined to be different.  We wanted a clean and green living environment for our people, even as we industrialised to create jobs and opportunities. We wanted clean air, and clear waters.

Trees were planted. An Air Pollution Unit was set up. The Singapore River was cleaned up – 10 years of tough work. We supplied clean drinking water to every home, and we began sewering our old colonial city.

We gave equal weight to ecology and prosperity, right at the start of our journey from third world to first.  Singapore has shown that a clean and green environment is not a cost – not even for a small emerging economy, a poor country.  It was an investment, and continues to be an investment, in our economy and our people.

You may be familiar with the story of our Newater¹.  It is a story of how we turned adversity into an opportunity.
 
PUB, our water works department, was worried, decades ago, that we would run short of water when we grow.  They developed water conservation plans, and EDB [Economic Development Board] worked in tandem to encourage water conservation and recycling in the industries. 

High wage but water intensive industries began to conserve and recycle water. They included semiconductor wafer fabs and petrochemical plants.  This spurred the development of water solutions and built an ecosystem of SMEs and water capabilities.  This culminated in Newater as our third water tap in Singapore².

With a recovery rate of 50%, we use every drop of water twice.  In other words, we have effectively doubled our water supply.  We have turned scarcities into abundance through knowledge and ingenuity.  PUB deserves a huge credit, for closing our water loop, and multiplying our supply.

We now look to close other resource loops in Singapore.  Waste can be our next water story.  E-waste, food waste, packaging – reduce, re-use, recycle, clean up and multiply our resources.

Ladies and Gentlemen,
The UN Global Compact set up in 2000, almost 20 years ago, to advocate 10 principles in labour and human rights, anti-corruption, and the environment.  Put simply, it covers the three nexus of business and people; business and anti-corruption practice, or governance; and business and planet.

Let me touch briefly on each of these.

First, business and people.

Businesses depend on people.  It depends on all of us in this room, and those outside this room.

Apart from the Global Compact principles of just and fair wages, and other good labour practices, businesses have a responsibility to train their workers beyond immediate job skills or even for the next job in the company.

Look at it this way – businesses have a head start, when an economy has a good education system to provide a trained workforce, and society has positive values to undergird productive work ethos. 

These are the social dowries from society.  They enable businesses to thrive and operate efficiently, and honestly.  In turn, businesses can, and should help their workers grow, and be ready for the future, beyond their work life.

Let me share one example.  One port operator took a broader and longer view of their CSR and people responsibilities.  They adopted a nursing home near their port operations.  Workers can volunteer their time and skills – they can be a befriender, or help with chores, in finance or in IT. 

The company took an additional step: a small step, but a very important step.  They educated their workers about the conditions, needs and challenges of ageing.  This helped their volunteers engage more meaningfully with the residents of the nursing home. More importantly, the volunteers themselves would now be better prepared for their own elderly relatives back at home.  They could also see and anticipate their own future needs, in retirement, or old age.

This is one thoughtful example of how we can help our workers be able and ready for their future, even beyond their work life or their working years.

Next, on business and anti-corruption practices.

We are all familiar with how Singapore transformed from third world to first.  One key driver was the building of trust in society. Be it a Government regulator or authority, an SME, or a large bank, trust is critical for sustainable growth.  One boss in China told a friend recently: Once we have trust, everything becomes simple.

Trust is why Singapore is a financial centre, a medical hub, an IP-rich manufacturing base, and now a trusted global mediation centre.

Some decades ago, I was chatting with the boss of a European testing services company. They were thrilled to have been hired by one Asian government to monitor the environment for the whole country.

They described one factory they visited. It had a pool outside, full of gunk.  And there was a river, a short distance away. Can you imagine what happens when it rains?  Even without rain, the gunk could seep into the ground, and then to the river nearby.  Less than a year later, the boss told me ruefully that their services had been terminated. They had been far too efficient in monitoring violations.

I have a simple presumption.  Whenever we can see polluted air, we will find dirtied water, and poisoned soil.  As one of my friends said, once you see a cockroach, there are bound to be other cockroaches around.  Pollution is a sign of ignorance, sometimes a sign of poor efficiency, corruption and weak governance.  Pollution is an indicator of how much governments and businesses truly care for its people, truly value their people.

Clean air, clear waters, healthy soil and green forests – businesses have a frontline responsibility to protect these natural resources. It is both good governance, and a real contribution to a better life for people in their communities.

Ladies and Gentlemen,
Do you know – eight of the 10 hottest years on record happened during the last decade?  And five of the hottest years were in the last five years³?  Glaciers are melting, and the Antarctica ice calving.  Storms are more powerful, more destructive, and more frequent. We can see from the news – floods, droughts and fires are more extreme.

At the same time, the growing world population means even more demand for resources, and even more emissions.  This is a challenge for business and planet.  We cannot continue with business as usual.  Yet, it is also an opportunity for better business. 

Businesses can save money – that’s what we all understand – when they reduce waste.  Businesses can reduce risks when they eliminate pollutions that harm people and planet. 

Some businesses have already planned for 100% renewable energy before or by 2050.  Others are setting yearly goals to reduce their greenhouse gas emissions.  For those of us who have not started, I propose that we take a simple first step, to report our electricity and transport usage by next financial year.  This is very simple, whether you are big or small, it’s a very simple step to take.  It’s a proxy for our indirect emissions⁴. Producers could also track and report on their direct emissions from burning fossil fuels⁵ or green forests. 

Many countries in Asia will face water shortages within the next decade or so. We can also report on our water consumption, for good measure. 

Once we track and measure, as all businesses know, we can start to scope our solutions to reduce emissions or reduce waste.

A few days ago, one boutique firm asked me what they should do.  My reply was a question: how much electricity are you using?  He didn’t know.  He went to do a quick check and was surprised.  This boutique firm needed just about $7,000 worth of carbon offsets for their annual electricity and air miles.  This set their CEO thinking.  Should he offset 20 times or 50 times their indirect carbon emissions?  This will be helpful and contribute to a cooler planet.

At Temasek, we have been investing in solutions for a cleaner, cooler, and more sustainable world.  These include plant based proteins, and better fertilisers.  Recently, our senior leadership debated – it was a pretty hard debate, quite emotional – but at the end, they decided that we will go carbon neutral by next year.

Dilhan Pillay, CEO of Temasek International, our investment arm, said: “Sustainability is not just one of our roles.  It is at the core of everything we do.”

An investment company like Temasek consumes mostly water, paper, electricity, and air miles.  We will be reporting these, starting with this financial year. 

Some of our portfolio companies are well ahead with their climate or UN SDG roadmaps.  We encourage others to join us to report electricity and water consumption, as well as any direct emissions.

We aim to halve the greenhouse gas emissions of our entire portfolio by 2030.  We will also study how we can shape a carbon neutral portfolio sooner than later.

To conclude, business is not easy – it’s never been easy!  We will face multiple headwinds in the decades ahead.  Yet, there are also opportunities in these challenges.  Technology, for instance, is both a threat and an opportunity. 

Businesses have the resources and organisational capacity to make a real impact in a systematic and tangible way.  From production and resource efficiency, to workforce training; from good governance to the environment – businesses can set the tone for their people. 

Doing right and doing good, to do well, will help them earn trust, and strengthen their social licence to operate.

The biggest challenge in the coming decade is to reduce the greenhouse gases, like CO2, or methane.  The risk of stranded assets is real.  Ask any coal fired power plant [owner] in the US, and now increasingly, in India.

I salute businesses that have started their journey with their workforce, and their community, for our planet.

Asia hosts more than half of the world’s population. We account for a growing share of global production, global consumption and resource usage. I call on businesses in Asia, including Singapore, to start with a simple first step – let’s track and report our resource usage and emissions, if we have not yet done so. 

If nothing else, that first step can be helpful to improve efficiencies, reduce cost, mitigate risks, or find new opportunities.  In so doing, we can improve resilience for our businesses ahead of the world of 2030.

Thank you.

______________________

¹ https://www.pub.gov.sg/watersupply/fournationaltaps/newater

² Singapore’s water taps are, first, water from local catchment; second, imported water; third, Newater; and fourth, desalinated water.

³ In ascending order, the warmest years on record have been 1998, 2009, 2013, 2005, 2010, 2014, 2018, 2017, 2015 and 2016.  The last five years have been the warmest five years on record.  See https://assets.climatecentral.org/images/uploads/gallery/2019GlobalTemps_Bars_F_en_title_lg.jpg 

⁴ The Task Force for Climate-related Disclosure (TFCD) recommends disclosure of Greenhouse Gas Emissions, and the related risks, for Scopes 1, 2 and 3.  Scope 1 emissions are direct emissions from owned or controlled sources. Scope 2 emissions are indirect emissions from the generation of purchased energy. Scope 3 emissions are all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions.  See https://ghgprotocol.org/sites/default/files/standards_supporting/FAQ.pdf for definitions, and https://www.tcfdhub.org/metrics-and-targets/, where recommended disclosures are detailed.

⁵ This is covered by the TFCD Scope 1 to report on direct emissions from combustion and operations.