Sustainability and Carbon Accounting: Why it matters to you as a Singaporean Company

Credit to NCCS

Singapore's commitment to a sustainable future is unwavering and the government is fully committed to their emissions pledge made in Paris, 2015. As the nation implements stricter environmental regulations, businesses of all sizes must adapt. A key area of focus is carbon accounting and reporting, impacting not only large corporations but also their vendor networks.

The Impending Mandate of Carbon Accounting

By FY2025, mandatory climate-related reporting requirements will be imposed on listed companies, followed by non-listed entities with more than SGD$100M revenue. This translates to a crucial obligation: disclosing their carbon footprint throughout their supply chains (Scope 3 reporting). Although your company might not meet the requirement to report, but you should still take steps to future proof your business because a) the government has not ruled out mandating all companies to do so and b) your customer will require you to provide carbon emissions reports to determine their supply chain emissions if they are required to do so.

Therefore, for vendors, the message is clear – the ability to report your own carbon footprint will increasingly become a prerequisite for success. Inability to do so might result in diminished competitiveness when vying for contracts or being caught off-guard. The positive side? Embracing carbon accounting transcends mere compliance. It presents a strategic opportunity for your business.

The Advantages of Sustainability Reporting

Several compelling reasons exist for vendors to actively engage in sustainability reporting:

• Future-Proofing Your Enterprise: Demonstrating a commitment to environmental responsibility through carbon footprint comprehension and reduction positions your business strategically. This aligns with the growing consumer and corporate demand for sustainable practices.

• Enhanced Client Acquisition:  Sustainability is a top priority for many large companies within their supply chains. The ability to report your carbon footprint grants you a competitive edge when bidding for contracts.

• Uncovering Cost-Reduction Opportunities: The process of carbon accounting often unveils areas ripe for energy consumption and waste generation reduction. This translates to significant cost savings over time.

• Boosting Employee Morale:  A growing trend sees employees seeking employment with companies committed to sustainability. Implementing sustainable practices fosters a more positive and engaged work environment.

Understanding the Three Scopes of Carbon Reporting

Carbon accounting entails considering three primary scopes:

• Scope 1:  Direct emissions from your own operations, such as those generated by burning fossil fuels for energy or utilizing company vehicles.

• Scope 2:  Indirect emissions associated with purchased electricity, heat, or cooling.

• Scope 3:  This encompasses all other indirect emissions across your entire value chain, ranging from raw material extraction to end-of-life product disposal. For many businesses, Scope 3 emissions will be the most significant. While tracking these emissions may seem challenging, resources exist to assist you in getting started.

By proactively embracing sustainability reporting, you can ensure your business thrives in the coming years. Remember, sustainability is not merely about compliance; it's about building a resilient and prosperous business for the long haul. Speak with us today to find out more about how sustainability can be incorporated into your daily operations.