Could you briefly introduce ERM’s presence in Singapore?

Singapore is one of our first offices in ASEAN, set up in 1996. We also have offices in Malaysia, Brunei, Vietnam, Indonesia and Thailand. We see great opportunities to grow in this region and we want to double our advisory and deep technical expertise to more than 100 in Singapore in the next two to three years.

ERM Singapore has helped government and private sector clients shape their ESG transition journey and operationalize sustainability over the years. The shift in regulatory and investors’ focus, the rising supply chain reconfiguration, the need for renewables and the pandemic have transformed the way in which companies regard the issue of climate change.

How has ERM’s service portfolio evolved in response to shifting demand trends?

With the rise of a stronger ESG agenda and sustainability becoming a key concern not just for the corporate sector but also for governments and regulators, the financial community and lenders, insurance companies, and the civil society and everyday consumers, our service offering has expanded and diversified accordingly. In Singapore we provide dedicated services to support renewable projects. On this front, the government is driving different projects of floating or rooftop solar power, as well as planning to import renewable energy from ASEAN and even Australia. Another emerging field that ERM plays a role in is clean hydrogen.

How ready is the manufacturing industry to take up renewables, and how ready is the technology around renewables to properly sustain the energy transition?

In terms of technological readiness, this is definitely available, and one can see large-scale renewable projects in full swing in Australia or Europe. On the other hand, the economic readiness of consuming industries to take up renewable sources is more debatable.

Some companies in Singapore are taking bold steps to minimize their GHG output, but for the heavy industries, like the steel sector, it will be very difficult to switch from fossil fuels. The long timeframe of the carbon tax allows energy-intensive sectors to plan ahead and adjust, but it will not be easy.

What is the culture of plastics recycling in Singapore?

Technology-wise, plastic producers have developed the right tools to bring plastic back into their production line, whereas industrial users are equally happy to buy recycled plastics. The challenge remains the downstream of the plastics value chain: waste. An issue specific to Singapore is that more than 90% of the population live in high-rise buildings and throw the rubbish through a chute into a single bin that sits at the ground level. Even if there is a dedicated “blue bin” for recycled materials like plastics and glass, this is only at the ground level. For unrecycled waste, the effort to sort through the common rubbish is undertaken by the National Environmental Agency (NEA), who also operates a Material Recovery Facility (MRF) whereby they segregate clean plastic from other waste. Nonetheless, it is a complex process, and the recycling rate can be further maximized.

I believe each segment of the value chain must work together and get better at segregating waste. It is heartening to see more initiatives taken by the pharmaceutical and chemical, as well as oil and gas companies, focusing and acting on recycling of plastics. ERM is currently supporting some of our clients on plastic recycling in South East Asia.

What role does ESG play as a factor in investment decisions?

From a shareholder perspective, the SGX has set into place the TCFD (Task Force for Climate Related Financial Disclosure) reporting requirement. Starting this year, listed companies need to report on their sustainability performance according to TCFD recommendations. Increasingly, however, non-listed companies are doing voluntary disclosure. These initiatives prove that equity is vastly influenced by the ESG profile of a stock. From a lenders’ perspective, we see much more favorable capital deployment for projects and companies with a clear sustainability agenda. Lenders and insurers want to know the real impact of their investment on society and the environment in the long run.

What are ERM’s top objectives for the next few years?

Our purpose is to support the world’s biggest corporations in their sustainability journey. This is a broad statement, but we are incredibly purposeful in our approach, and we take good care to ensure the safety of our people and community, the transparency across the supply chains, and the good of our environment. We certainly see scope for driving more ESG and renewables projects and playing an even greater role in the transition from a linear to a circular economy.