Understanding ESG Metrics: A Guide to Emissions Scopes and Sustainability
As Singapore continues to prioritize environmental and social responsibility, the adoption of Environmental, Social, and Governance (ESG) metrics has become essential for companies aiming to meet national sustainability goals. ESG metrics offer a comprehensive way to measure and manage corporate impact on the environment and society, aligning with Singapore’s ambitions under the Green Plan 2030 to build a more sustainable, resilient future.
Let’s go through an overview of ESG metrics, the three primary emissions scopes, and explore the emerging concept of Scope 4 emissions in the context of Singapore’s unique sustainability goals in the following sections.
ESG Metrics in Singapore: Why They Matter
ESG metrics are a powerful framework for assessing a company's environmental impact, social responsibility, and governance practices, forming a critical component of Singapore’s climate and sustainability goals. By focusing on responsible corporate practices, companies not only address environmental issues but also mitigate risks, improve operational resilience, and build stakeholder trust.
Singapore’s Green Plan 2030, led by the Ministry of Sustainability and the Environment, emphasizes the role of ESG metrics in achieving targets for carbon reduction, renewable energy and a circular economy. But what is the significance of ESG metrics, and how do ESG metrics align with these sustainability goals and contribute to reducing emissions across various sectors?
The Importance of ESG Metrics
ESG metrics are a powerful framework for assessing a company's environmental impact, social responsibility, and governance practices, forming a critical component of Singapore’s climate and sustainability goals. By focusing on responsible corporate practices, companies not only address environmental issues but also mitigate risks, improve operational resilience, and build stakeholder trust. Singapore's Green Plan 2030 emphasizes the importance of ESG in achieving its targets for carbon reduction, renewable energy, and a circular economy.
What are Emissions Scopes 1, 2, and 3?
Emissions scopes provide a structured approach for businesses to understand and manage their greenhouse gas (GHG) emissions, aligning with Singapore’s aspirations for a low-carbon economy. Before we dive deeper into each one, here’s a summary of the 3 scopes in a nutshell:
Scope 1: Direct Emissions
Scope 1 emissions are direct GHG emissions from sources owned or controlled by a company. In Singapore, this could include emissions from local manufacturing facilities or company-owned transportation fleets. For instance, Sembcorp Industries has implemented innovative green technology solutions to reduce direct emissions through waste-to-energy plants and urban resource recovery facilities. By converting waste into usable energy, Sembcorp not only helps reduce waste but also provides a renewable energy solution that contributes to Singapore’s zero-waste targets. Learn more about Sembcorp’s sustainability strategies on its official page.
Scope 2: Indirect Emissions from Energy
Scope 2 emissions represent indirect GHG emissions from the energy a company purchases, such as electricity. In a densely populated city-state like Singapore, the transition to renewable energy sources is vital for achieving Scope 2 reductions.
Singapore Power’s Green Energy Tech Hub provides renewable energy solutions for businesses to reduce these emissions, offering clean energy options from solar, wind, and green electricity. By partnering with companies to encourage a shift to renewable energy, Singapore Power plays an integral role in helping businesses achieve their Scope 2 emissions goals. More on these initiatives is available from the Energy Market Authority.
Scope 3: Other Indirect Emissions
Scope 3 covers a wide range of indirect emissions across a company’s entire supply chain and product lifecycle, often the largest component of a company’s carbon footprint. For example, Singapore-based companies like DBS Bank are leading in managing Scope 3 emissions by embedding ESG principles across their lending portfolios and supply chains. Through sustainable finance, DBS supports initiatives across Asia that aim to lower supply chain emissions and promote responsible sourcing. To learn more, check out DBS’s Sustainability Report.
Newly added Scope 4 to Enabling Broader Emissions Reductions
As Singapore moves toward a green economy, the idea of Scope 4 emissions has emerged, representing indirect societal benefits from low-carbon products and services. Scope 4 emissions differ from the other three scopes in that they focus on enabling reductions in the broader ecosystem, extending beyond a company’s immediate operations to benefit the community at large. For instance, Singapore’s investment in electric vehicle (EV) infrastructure, like EV charging points across public housing car parks, supports a shift towards cleaner transportation for the nation as a whole. Companies such as ComfortDelGro and Grab are expanding their EV fleets, providing more sustainable transport options for the public. By enabling citizens to choose low-carbon travel alternatives, these companies contribute to reducing emissions beyond their own footprint—a key tenet of Scope 4. For a closer look at Singapore’s EV roadmap, refer to the Land Transport Authority’s EV Initiatives here.
The Road Ahead for ESG and Emissions Scopes in Singapore
As ESG practices become increasingly embedded within corporate and government strategies in Singapore, the alignment with emissions scope targets will play a central role in achieving national sustainability goals. Each emissions scope offers companies a clear pathway for contributing to the Green Plan 2030, helping Singapore reduce its overall carbon footprint and promote a more sustainable society. Scope 4, in particular, encourages businesses to innovate and expand their positive impact on the environment by offering solutions that empower the public to reduce their own carbon footprints.
In Singapore, ESG is more than a corporate mandate—it’s a national priority that encourages the private sector to join in creating a sustainable future. As businesses adopt ESG frameworks, they’re helping to build a robust, green economy that not only reduces emissions but also aligns with Singapore’s long-term environmental vision.
Are you ready to contribute to Singapore’s green economy? Join the growing movement of companies using ESG and emissions scopes to drive positive change across Singapore, one step at a time!
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