Speech by Singapore’s Ambassador for Climate Action at the SBF Dialogue in 2025

Transition Planning for Business Resilience and Competitiveness

Good afternoon, ladies and gentlemen.

Recent political developments in the US have raised questions about the future of climate action. Some of you may wonder: Is now really the time to invest in sustainability efforts?

I understand the hesitation. Political priorities are indeed shifting. It may seem prudent to wait for clearer signals.

But here’s the reality: regardless of politics, the world is transitioning towards a climate-impaired and carbon-constrained future. 

• By climate-impaired, I mean a world where climate change materially disrupts lives and livelihoods.

  • These disruptions reshape supply chains, damage infrastructure, reduce productivity, and increase costs.

  • Businesses will need to build resilience to these changes.

• By carbon-constrained, I mean a world where greenhouse gas emissions are sharply reduced to mitigate further climate change.

  • This will be driven by stricter regulations, higher carbon taxes, and growing market pressure to adopt low-carbon solutions.

  • Businesses will need to operate within these limits, transforming how they source, produce, and distribute. 

Today, I will talk about:

• what will drive the transition;

• why businesses cannot afford to wait; and

• how businesses can plan for the transition.

DRIVERS OF TRANSITION: POLITICS, ECONOMICS, NATURE

Three driving forces—politics, economics, and nature—will shape the transition.

The politics is mostly unfavourable.

• In the United States, the climate agenda is facing strong political headwinds.

  • President Trump has issued orders to expand oil and gas exploration and cut renewable energy subsidies.

  • The Environmental Protection Agency has said it will reconsider emissions standards for vehicles and gas and coal fired power plants.¹

• But China has reaffirmed its commitment to the green transition. At the recent Two Sessions, it announced plans to:

  • implement major renewable projects;

  • expand the coverage of its national emissions trading system; and

  • support decarbonisation in key industries.²

The economics is mixed.

• Renewable energy is now cheaper compared to fossil fuels in many markets and the bulk of global energy investments are going into clean energy.

• Sales of electric vehicles are taking off, on the back of more affordable batteries.

• But some critical green technologies like low-carbon hydrogen, carbon capture, and sustainable fuels for maritime and aviation still require significant cost reductions before they become mainstream.

But nature has been consistent - climate change is accelerating and will only get worse.

• Extreme weather events—wildfires, floods, and heatwaves—are becoming more frequent and more severe.

• The worst is yet to come, as ocean currents continue to weaken, the polar ice caps melt, and glaciers recede.

As the climate crisis intensifies, governments and markets will be forced to act.

• Political inertia will end when extreme weather and resource shortages disrupt lives and livelihoods on a scale too big to ignore.

• Economic calculations will be shaped by the necessity of adapting to climate change and decarbonising to mitigate further climate change.

• Increased investments in low-carbon technology and solutions will drive costs down, making the transition more economically viable.

Singapore is staying the course on climate action.

• We have committed to reducing emissions to “between 45 to 50 million tonnes of carbon dioxide equivalent by 2035” – a significant step toward our 2050 net-zero target.

• We are steadily implementing the policies we need to get there.

  • We are raising the carbon tax to $50–$80 per ton by 2030, with revenues recycled to support businesses in their decarbonisation efforts.

  • We are planning to import 6 gigawatts of low-carbon electricity by 2035 and aim to meet one-third of our energy needs with clean energy.

We stay the course not because it is easy, but because it is necessary for Singapore, so that we can be resilient in a climate-impaired world and competitive in a carbon-constrained world.

TRANSITION PLANNING MUST BECOME A BUSINESS PRIORITY

What does all this mean for businesses?

Companies around the world are drawing up climate transition plans.

• In 2023, almost 6,000 companies disclosed climate transition plans to the CDP, the world’s largest environmental disclosure system; a 44% increase from 2022.

• An additional 8,200 companies plan to disclose their transition plans by 2025.³

MNCs are demanding lower-carbon products and services from their suppliers.

• According to a report by Standard Chartered Bank, 78% of leading MNCs globally plan to remove suppliers which endanger their carbon transition plan, by 2025. This potentially excludes up to 35% of existing suppliers globally.

• The same report states that 91% of MNCs with a supply chain that touches Singapore have set emission reduction targets for their suppliers, asking for an average reduction of 30% by 2025.⁴

Transition planning must become a priority for our businesses.

• Yes, transition planning is difficult and will incur costs. 

• You may need to invest in new technologies, processes and skills, at a time of heightened economic uncertainty.

• Companies that act early will be able to shape their strategies on their own terms, secure market leadership, and attract capital that increasingly prioritises sustainability.

• Those who wait will scramble to adjust amid abrupt regulatory shifts, supply chain disruptions, and dwindling investor confidence. 

A good corporate transition plan should seek to answer three basic questions: Where are you now? Where do you need to go? How will you get there?

MEASURING CARBON FOOTPRINTS AND UNDERSTANDING CLIMATE RISKS

Let us begin with the first question: where are you now? This entails understanding three things:

• what is your carbon footprint?

• what are your transition risks as the world become carbon-constrained?

• what are your physical risks as the world becomes climate-impaired?

Accurate measurement of carbon footprints is the foundation for effective climate action.

• You can start by tracking emissions across your operations to identify opportunities to reduce them.

• You can then benchmark against industry standards while demonstrating transparency by leveraging various tools, such as CDP’s disclosure system and scoring.

• With a good sense of your carbon footprint, you are better placed to evaluate the transition risks facing your business.

Carbon pricing is a key transition risk as it could significantly increase costs for businesses that fail to decarbonise.

• Carbon pricing is proliferating, and we can expect businesses to face progressively higher carbon prices globally.

• The EU’s carbon price of ~80 Euros per ton is projected to rise to ~135 to ~160 Euros by 2030.⁵ This will drive up the effective Carbon Border Adjustment Measures (CBAM) levy, increasing costs for exporters into the EU market.

• Closer to home, Thailand has introduced a small carbon tax and Malaysia has announced plans to implement one in 2026.

Another transition risk is the pace of innovation in low-carbon technologies.

• Electric vehicles are displacing combustion engines, renewable energy is gradually replacing fossil fuels, and circular economy practices are transforming supply chains.

• While these advances create growth opportunities, they also pose risks for businesses that are reliant on outdated technologies.

• Businesses should evaluate how much of their legacy infrastructure and carbon-intensive assets could become stranded as cleaner alternatives gain traction.

Our businesses must also assess the physical risks posed by climate change on their finances and operations.

Rising temperatures will lead to labour productivity losses.

• According to the Third National Climate Change Study, in a worst-case scenario, Singapore could face daily maximum temperatures exceeding 35 degrees Celsius almost year-round. This would be a marked increase from the historical average of 21 such days each year.⁶

• According to a study by the National University of Singapore, economy-wide losses in Singapore due to lower productivity from heat stress could nearly double to $2.22 billion by 2035 from 2018 levels.⁷

• Sectors that rely on outdoor work – such as construction and logistics – will be hit hard, with greater risks of heat stress, higher cooling costs, and potential delays in project timelines.

Businesses could face disruptions as extreme weather affects supply chains.

• Extreme weather in other parts of the world can delay cargo shipments, increase freight costs, and cause supply shortages here.

• Rising temperatures and shifting rainfall patterns can also threaten global food supply chains, affecting food importers, retailers, and restaurants in Singapore.

As climate risks increase, businesses could see rising insurance costs, or even fail to secure coverage in high-risk areas.

• The real estate sector in Asia-Pacific is already experiencing higher insurance premiums for properties exposed to extreme weather and flooding.

• Firms that fail to account for climate-related vulnerabilities could face higher borrowing or financing costs.

Measuring carbon footprints and understanding climate risks may seem daunting but support is available.

• For small and medium enterprises, limited resources, expertise in carbon management, or access to data present real challenges to get started on transition planning.

• Support is available to help businesses take that critical first step.

  • Enterprise Singapore, for instance, supports SMEs on measuring emissions, understanding climate risks, and identifying opportunities.⁸

We will not be able to eliminate all climate risks, but that is not a reason for inaction. The aim of transition planning is to understand our exposures and act where we can. 

SETTING CLIMATE GOALS AND TARGETS

Once you know where you are, the next question is: where do you want to go?  

• It is not just about announcing a net-zero emissions target by 2050.  It is about setting meaningful interim targets over the next two decades.

Targets must be ambitious, grounded in science, and reflect your business realities.

• Your targets should reflect your industry pathways and your operational priorities.

  • For example, businesses in the transport sector may set sector specific alignment targets – such as increasing the share of zero-emissions vehicles.

• Your targets should account for stakeholder expectations.

  • Are investors and financiers scrutinising the credibility of your transition plans?

  • A survey of 400 investors found that 37% currently invest in strategies targeting companies with credible transition plans, with another 26% planning to do so in the next two years.⁹

• Your targets should be sensitive to shifts in consumer preferences.

  • According to a study, while 80% of Singapore consumers say they care about the environment, only 32% actively base their purchasing decisions on sustainability.¹⁰

  • But consumer choices may change with a generational shift.  According to another survey, 60% of Gen Z and 79% of millennial Singaporeans say they are willing to pay a premium for sustainable products or services.¹¹

DEVELOPING TRANSITION STRATEGIES

Next, having set climate goals and targets, how do you get there?

Transition planning requires embedding sustainability into every aspect of your operations.

• It could mean switching to renewable energy sources, improving energy efficiency, or engaging suppliers to reduce Scope 3 emissions.

• There is no one-size-fits-all pathway and the strategies for transition will differ depending on your company’s emissions profile, business size, and sector dynamics.

Companies in highly emissive sectors may need to restructure their core business activities, diversify product lines, and invest in new infrastructure and technologies.

• These sectors include manufacturing, energy and heavy transport.

• Some of our SMEs are pivoting their business activities and capturing opportunities.

  • Take for instance the partnership between local SME SC Auto and Volvo which resulted in the first made-in Singapore electric bus.

  • Volvo provided the core EV technology while SC Auto manufactured the bus.

  • SC Auto is now well positioned to seize market opportunities as the region shifts towards sustainable transportation.

Companies in less emissive sectors may want to capitalise on new growth areas that arise from the increasing demand for decarbonisation across sectors.

• ICT companies can develop tools like carbon tracking software and smart energy management systems to optimise energy use in emissions-intensive sectors.

• Firms in professional services can offer expertise in carbon accounting, net-zero strategy development, and supply chain optimisation.

SYNERGISING TRANSITION PLANS

Transition planning cannot be done in isolation. There is much value in synergising transition efforts.

• First, taking an ecosystem approach.

  • Consider a logistics company planning to electrify its fleet. It needs to coordinate its plans with power grid operators, charging infrastructure providers, and real estate stakeholders, to ensure effective implementation.

• Second, coordinating actions across the supply chain.

  • For example, a manufacturer adopting low-carbon materials depends on upstream suppliers from different industries – such as chemical or mining – to decarbonise concurrently.

• Third, seeking opportunities for cost savings through collective action.

  • When sourcing for sustainable materials or technologies, collective industry action allows aggregation of demand and negotiation of better prices with suppliers, helping to lower costs.

• Fourth, developing sectoral transition pathways.

  • Corporate transition plans need to be guided by clear roadmaps that coordinate key ecosystem players, identify dependencies across sectors, and align with government policies and initiatives.

We see encouraging examples of industry collaboration and public-private partnerships.

• The Singapore Sustainable Finance Association collaborated with the Singapore Green Building Council to bring together real estate developers, financial institutions and consultants, and identify common levers for decarbonisation in real estate.

• The government has worked with various stakeholders to publish green transition roadmaps for Aviation, Data Centres, Marine & Offshore, Maritime, and Tourism.

• Enterprise Singapore partnered with the Singapore Logistics Association to develop a sustainability playbook tailored for logistics enterprises – providing guidance on reducing emissions and managing energy use efficiently.

We also see business associations and large corporations stepping up to support SMEs.

• An example: The Singapore Business Federation and Bain & Company recently launched the SME Sectoral Net Zero Transition Programme.

  • This initiative provides SMEs with sector-specific guidance, access to sustainability-focused funding and solution providers, and ongoing advisory support from decarbonisation experts.

  • The programme’s pilot run with 21 food manufacturers yielded good results – 80% of participants established their emissions baseline for the first time and set targets to reduce Scope 1 and 2 emissions by 50% by 2030.

Industry and business associations are well positioned to lead the charge on transition planning.

• You can work closely with relevant government agencies to coordinate efforts to develop sector-specific roadmaps and foster collaboration across supply chains and sectors for effective transition planning.

CONCLUSION

Let me conclude.

Businesses cannot ignore short-term political and economic headwinds.  You will need to make tactical adjustments in response to changing policy regimes and market conditions.

But the underlying transition towards a carbon-constrained and climate-impaired world is inexorable.

Politics, economics, and nature will diverge from time to time, but they will ultimately converge.  Eventually, nature will call the shots, regardless of electoral or business cycles.  Nature will set the timeline, whether we are ready or not.

The question is not whether the transition will happen, but how prepared we are for it.  The choice is not whether to start transition planning, but whether we do it on your own terms or are forced to react later.

Thank you.

¹United States Environmental Protection Agency. (2025, March 12). EPA Launches Biggest Deregulatory Action in U.S. History. Retrieved from https://www.epa.gov/newsreleases/epa-launches-biggest-deregulatory-action-us-history

²State Council of the People's Republic of China. (2025, March 12). Full text: Report on the Work of the Government. Retrieved from https://english.www.gov.cn/news/202503/12/content_WS67d17f64c6d0868f4e8f0c10.html

³CDP Worldwide. (2024, June). The state of play 2023: Climate transition plan disclosure. Retrieved from https://cdn.cdp.net/cdp-production/cms/reports/documents/000/007/783/original/CDP_Climate_Transition_Plans_2024.pdf?1720436354

⁴Standard Chartered. (2021, June 7). Carbon dated: Multinational companies planning to cut suppliers by 2025 for failing to curb carbon emissions. Retrieved from https://www.sc.com/us/2021/06/08/carbon-dated-multinational-companies-planning-to-cut-suppliers-by-2025-for-failing-to-curb-carbon-emissions/

⁵Homaio. (2025). What are the EUA price forecasts for 2030? Retrieved from https://www.homaio.com/post/what-are-the-eua-price-forecasts-for-2030

⁶Centre for Climate Research Singapore (CCRS). (2025). Third National Climate Change Study (V3). National Environment Agency. Retrieved from https://www.mss-int.sg/docs/default-source/v3_reports/v3-stakeholder-report_20240306.pdf

⁷National University of Singapore (NUS). (2025, March 15). Heat stress causes lower fertility, productivity, and reduced cognitive capacity: Project HeatSafe. Retrieved from https://medicine.nus.edu.sg/news/heat-stress-causes-lower-fertility-productivity-and-reduced-cognitive-capacity-project-heatsafe/

⁸Enterprise Singapore’s Enterprise Sustainability Programme (ESP) offers support for businesses looking to integrate sustainability into their operations and capitalise on green economy opportunities. The program includes sustainability courses on decarbonisation and sustainability finance, sustainability playbooks that offer sector-specific guidance, as well as grants (e.g., Enterprise Development Grant, Sustainability reporting grant) that help businesses build capability. Enterprise Singapore (2024). Enterprise Sustainability Programme. Retrieved from https://www.enterprisesg.gov.sg/grow-your-business/boost-capabilities/sustainability/enterprise-sustainability-programme

⁹Robeco. (2024). 2024 Global Climate Investing Survey. Retrieved from https://www.robeco.com/files/docm/docu-202405-robeco-global-climate-investing-survey.pdf

¹⁰Accenture & WWF-Singapore. (2021). Study reveals a clear unmet consumer demand for sustainable products in Singapore: Sustainability in Singapore – Consumer and Business Opportunities. Retrieved from https://www.wwf.sg/study-reveals-a-clear-unmet-consumer-demand-for-sustainable-products-in-singapore-accenture-and-wwf/

¹¹Deloitte. (2024, May 17). Deloitte’s 2024 Gen Z and Millennial Survey finds these generations stay true to their values as they navigate a rapidly changing world. Retrieved from https://www2.deloitte.com/sg/en/pages/about-deloitte/articles/gen-z-millennial-survey-finds-generations-stay-true-to-their-values.html