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On sustainability matters, Singapore businesses still respond best to strict regulations: SAP

Jovi Ho
Jovi Ho11/9/2022 06:15 PM GMT+08  • 3 min read
On sustainability matters, Singapore businesses still respond best to strict regulations: SAP
On the flipside, too much focus on compliance is the second-biggest sustainability challenge for businesses in the region.
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Sustainability remains a “carrot and stick” issue for companies here, as local firms respond to regulation over other motivations.

A recent study by Oxford Economics and SAP found that regulatory mandates are one of the key drivers of sustainability strategies, with Singapore leading at 74%, 60% for Indonesia and 52% for Malaysia.

Regulatory compliance is the main benefit (43%) for companies in Singapore, ahead of reduced carbon emissions and reduced costs.

On the flipside, too much focus on compliance is the second-biggest sustainability challenge for businesses in the region (26%), only behind reinventing business strategy. This complaint resonated most strongly in Singapore (32%) and Indonesia (27%).

The study sampled 650 companies across Asia Pacific and Japan. In Singapore, 47 companies were surveyed, with 93 others surveyed in Malaysia and Indonesia.

In a Nov 7 press release, SAP says organisations in the region remain disconnected from sustainability plans and actions. “On average, 60% of businesses have a clearly communicated sustainability plan, with Japan leading at 68% and Indonesia scoring lowest at 46%.”

See also: Greening buildings, financing and disclosures: OCBC evaluates Singapore's real estate sector

Only 20% of companies in the region have incentivised leaders based on the success of sustainability strategies and less than half (44%) say their employees are active participants in their sustainability efforts, with the highest in India at 52%, followed by Singapore at 51% and the lowest in Malaysia at 33%.

“It is an encouraging sign that businesses across South East Asia are increasingly mindful of sustainability practices along their entire supply chain, including those of their suppliers,” says Verena Siow, president and managing director, SAP Southeast Asia.

“There is no time to waste to move beyond strategy and to achieve real, tangible results,” she adds. “In three years, almost a third of businesses expect significant value from their sustainability strategy — and we believe that with the right focus, this number can be even higher.”

See also: Singapore solar cable project wins lifeline to carry on building

Measuring carbon

Ineffective data for decision-making is considered a moderate challenge in the region. Less than one in six (13%) businesses in Singapore, and less than a quarter (23%) in Malaysia and Indonesia, have calculated their total organisational carbon output.

A majority (60% in Singapore, 77% in Malaysia) have begun the process in some areas, compared to just 31% in Indonesia.

Of the businesses that have begun measuring their carbon, 62% across the region have made changes to their processes based on the calculations.

Investments in data analysis to measure sustainability in business remain the minority with 47% in Singapore, 35% in Malaysia and 31% in Indonesia citing their commitment to the investment.

Similarly, only 36% of Singapore businesses are training staff on capturing sustainability data, compared to 40% in Indonesia and 50% in Malaysia.

“Sustainability leaders go beyond vision to ensure that sustainability initiatives are acted upon,” says Edward Cone, editorial director of Oxford Economics. “They communicate with key constituencies both inside and outside the company, and they use integrated technologies to measure and track performance in a way that drives accountability.”

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