The growing awareness on the effects of climate change has made sustainability a key agenda for governments, corporations and consumers over the past few years. Corporates have had a major role to play in this transition, with many carving out corporate responsibility missions and exploring new ways of executing their operations with minimal detriment to the environment.
Financial institutions have also jumped onto the bandwagon by tweaking their operations to embed sustainability into their business models and practices. The shift serves to meet the requirements of investors and customers, notes Eric Lim, chief sustainability officer at the United Overseas Bank (UOB).
As one of the largest banks in Asia, UOB sees itself having a duty to contribute to both Singapore’s and the region’s long-term economic, social and environmental well-being. “In addition to helping businesses advance responsibly, we [want to] make banking more accessible and inclusive and help our customers lead more sustainable lifestyles for the good of the environment and society at large,” Lim tells The Edge Singapore.
UOB’s push for facilitating sustainable practices amongst its customers comes as building and construction projects account for 39% of carbon emissions globally, according to data from the Global Alliance for Buildings and Construction. Countries around the world are scrambling to reduce their carbon emissions. Singapore is no different, and has a target to reduce carbon emissions here by 36% from 2005 levels, by 2030.
UOB has been advocating sustainable practices such as adopting and promoting – what Lim calls – climate-resilient practices that support customers’ transition towards a more eco-friendly future. One such scheme the bank has is U-Energy. Launched in October 2021, the one-stop financing platform supports the implementation of energy efficient projects such as the retrofitting of cooling systems in buildings. Such projects can help companies cut back on their electricity bills and carbon emissions substantially, all while achieving their sustainability goals, explains Karunia Tjuradi, head of UOB’s sector solutions group.
A notable project under the U-Energy scheme was the energy efficiency retrofitting project at the Singapore Exchange Centre. This involved the enhancement of the building’s chiller plant, which in turn brought about a 47% reduction in energy consumption. This is equivalent to taking 395 cars off the road for a year, says Tjuradi, referencing calculations made using the United States Environmental Protection Agency’s Greenhouse Gas Equivalencies Calculator.
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In another move, the bank also launched U-Drive in 2021. The scheme is aimed at driving the adoption of green transportation by simplifying a customer’s transition to electric vehicles. Through this, UOB hopes to address the substantial amount of carbon emissions that come from transportation and logistics, which collectively account for the third largest pollutive sector in Singapore, says Tjuradi.
UOB’s U-Energy and U-Drive serve to complement the bank’s U-Solar scheme that was launched in October 2019. The solar ecosystem financing platform addresses the financing needs from the adoption of renewable energy across the entire solar value chain. What makes the platform unique is its partnerships with solar developers, contractors, businesses and homeowners across Singapore, Malaysia, Indonesia and Thailand to amalgamate the ecosystem players and end-users, explains Tjuradi. Over the two years since its launch, U-Solar has facilitated the generation of close to 210 GigaWatt (GW) hours of solar power across Singapore, Indonesia, Malaysia, Thailand and Indonesia. This translates to a reduction of over 114,000 tonnes of carbon dioxide equivalent in greenhouse gas emissions, which is the same as having close to 1.87 million new tree seedlings growing over 10 years.
Looking at the adoption of U-Energy, U-Drive and U-Solar, Tjuradi is encouraged by the development of the region’s solar power sector. “The strong adoption rate has led to lower solar installation costs and better project returns,” he quips. Going forward, he is expecting solar power to become the preferred renewable energy source. A push to make the switch to more sustainable energy sources is likely to come this year, amid expectations of volatile electricity, energy and gas prices.
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Even as sustainability is a key focus for UOB, Lim stresses that it is not a milestone to be achieved. Rather, he sees it as a fundamental mindset on how “we run our business”. “It is an extension of our values of honour, enterprise, unity and commitment, as we create long-term economic and social value for our stakeholders,” he adds. The bank’s efforts have culminated in it being a “Champion of Good”, in every edition since the inception of the initiative in 2017. Since then, UOB has continued to actively engage its people to communicate the bank’s sustainability strategy. “With the involvement of every employee, we will successfully drive [a] customer-centric transformation programme, that is focused on forging a sustainable future for generations to come,” says Lim.
Champions of Good was launched as a national recognition initiative by the Company of Good. It recognises organisations that are exemplary in doing good and have also been a multiplier by engaging their partners and stakeholders on a collaborative journey.
Sustainability forms a fundamental mindset on how UOB runs its business, says Lim (Image credit: OEL)
Creating net positive value
Another prominent Champion of Good is S&P Global, a leading provider of credit ratings, benchmarks and analytics in the global capital and commodity markets. By having sustainability at the heart of its strategy, the financial institution embodies Company of Good’s mission for organisations to do good strategically, sustainably and impactfully. “We believe that sustainable companies add net positive value to economies and societies, so we are committed to adopting best-in-class ESG practices, with sustainability integrated into our value chain, key functions and decisions,” Alyson Genovese, global head of corporate responsibility at S&P Global tells The Edge Singapore.
An early mover in the sustainability scene, the company has been publishing an annual sustainability report for the past 10 years to provide transparency into its key operations and metrics, quips Genovese. The move builds on the company’s role in providing essential intelligence, that includes data, research, credit ratings, benchmarks and ESG solutions.
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With this in mind, the financial institution launched S&P Global Sustainable1 in April 2021. Sustainable1 represents the company’s single source of essential sustainability intelligence that supports customers with ESG products, insights and solutions across the various divisions in the company. Some tools that customers have access to include differentiated ESG scores, data and methodology and a core set of thematic global ESG indices. Users can also get transparency into emerging sectors and insights on climate and energy transition.
With investors and companies seeking ESG data, analytics and insights, Sustainable1 looks to match customers with products that are tailored to their unique needs, says an S&P Global Sustainable1 spokesperson. Presently, Sustainable1 has over 700 billion climate and ESG data points as well as a research universe of 11,500 companies.
On the energy front, some banks in Singapore have been working with S&P Global Platts on setting up carbon trading desks, on the back of a transition towards a low-carbon economy. In another scenario, the Platts voluntary carbon credit assessment was cited as a spot reference price during discussions in a recent parliamentary seating in Singapore on establishing a carbon tax and trading carbon credits in the voluntary carbon market.
Meanwhile, S&P Global has been seeing strong interest in its Corporate Sustainability Assessment (CSA), which serves to aid companies looking to establish a sustainability baseline. The tool also provides companies with independent insights on their sustainability performance vis-à-vis that of their peers. Last year, over 1,800 companies representing 45% of the global market capitalisation completed the CSA. Company spokespersons attribute this to the importance of the results from the assessment to the financial community, employees, customers and stakeholders of a company.
In sum, S&P Global’s initiatives is in line with the company’s mission to do good for all stakeholders, the environment and the global community. “To ensure that communities thrive together with tomorrow’s markets, we believe we have a part to play in enabling sustainable development by bridging the global skills gap, creating an inclusive economy and promoting a sustainable environment,” stresses Genovese.
S&P Global's CSA serves to aid companies looking to establish a sustainability baseline (Image credit: S&P Global)
Champions of Good
UOB and S&P Global are among 97 unique organisations that have been recognised as Champions of Good since its inception in 2017. While the Champions make their contributions to society and serve as multipliers in different ways, they each exemplify the values of Company of Good’s 4 ‘I’ framework: investment, integration, institutionalisation and impact.
Aside from spurring companies to continue embedding goodness at the core of business, Annie Koh sees the Champion of Good recognition as a form of responsibility. “The fact that you are being recognised means you have to do more to share,” says Koh, Professor Emeritus of Finance (Practice) at the Singapore Management University’s (SMU) Lee Kong Chian School of Business.
Interestingly, Koh believes that all companies are given the privilege and responsibility to do good with their collective assets such as financial, infrastructural, social and human capital. Such resources allow companies to create value such as through new jobs and solve social problems.
Meanwhile, Koh believes that financial institutions – being trusted entities which are regulated – can do more and build impact through their loans portfolio to both big and small companies. “In any society, financial inclusion is an important mission that has the ticket to make financial resources available,” says Koh, adding that all financial institutions can make a difference in making the world a better place for all generations.
When asked how doing good can impact a company, Koh says that is not “immediately obvious”. It is a journey, she stresses, noting that companies that are part of the Champions of Good ecosystem will have new purpose of why and not just the how of doing good. For one, suppliers, partners and employees will want to be associated with companies who are known to be doing good.
“The benefits may not just translate to short-term profitability, or long-term growth and sustainability. I am sure that many of the Champions of Good have been sowing the seeds of doing good in the past few years and will be gathering the fruits of doing good in the years to come,” asserts Koh.
Cover image: file photo
In any society, financial inclusion is an important mission that has the ticket to make financial resources available, says SMU's Koh (Image credit: S&P Global)
Applications for Champions of Good 2022 are now open. Apply today or nominate a deserving organisation to be recognised as an exemplary leader and multiplier of good at www.companyofgood.sg/champions
