Green financing refers to the practice of funding money or providing funds for projects that have positive environmental impacts. This type of financing helps businesses implement sustainable practices and transition to a more environmentally-friendly model.
In the Singapore context, there are 5 types of green financing that small businesses can utilize:
1. Green Bonds: Green bonds refer to debt securities issued by governments to finance environmentally-friendly projects.
2. Sustainable Financing Facilities: These are financing solutions offered by banks and other financial institutions that provide funding for companies to take on environmentally sustainable projects.
3. Environmental, Social, and Governance (ESG) Funds: These are investment funds that focus on investing in companies that have strong environmental, social, and governance practices. Small businesses can access these funds to finance their green initiatives.
4. Energy Efficiency Financing: This type of financing helps businesses implement energy-efficient technologies, such as LED lighting, insulation, and energy-efficient HVAC systems, to reduce their carbon footprint.
5. Government Grants and Subsidies: Singapore government offers a range of grants and subsidies to support small businesses in their transition to a more sustainable model, including funding for energy efficiency projects and renewable energy projects.
These financing solutions can help businesses implement sustainable practices, reduce their carbon footprint, and make a positive impact on the environment.
VALORES GLOBAL is also working with industry partners to encourage more SMEs to jump onto the sustainability bandwagon by providing tangible incentives to companies that make an effort in reducing their carbon footprints. We will be launching our program in due course and inviting liked-minded enterprises and individuals to join us as part of the first movers of this net-zero and green economy.
One of the key ways to understand and measure a business's environmental impact is by assessing its carbon footprint. A carbon footprint refers to the amount of carbon dioxide (CO2) and other greenhouse gases emitted as a result of an organization's activities - from operating an office to producing a product. Organizations that measure their carbon footprints can use that information to identify areas of potential improvement and make strategic decisions related to reducing their emissions over time.
To identify areas for reduction, a carbon footprint assessment analyzes an organization's energy use, transportation, waste, and other activities. Indirect emissions, such as those caused by goods and services purchased, will also be included in the assessment. Typically, a carbon footprint assessment tool uses one of the following approaches to calculate the organization's total greenhouse gas emissions:
1. An industry-standard methodology such as the Greenhouse Gas Protocol, which guides organizations looking to measure and reduce their carbon emissions; or
2. An internal corporate measurement approach can be tailored to the organization's needs and may be preferable to some organizations that prefer a more customized approach to measuring their carbon emissions.
The business can begin reducing its emissions once it has assessed its carbon footprint. By using energy-efficient lighting, equipment, and appliances, and improving the building's insulation, energy efficiency is one of the most effective ways to reduce emissions. Renewable energy sourcing is another way to reduce emissions, by investing in solar, wind, or hydro energy, or purchasing Renewable Energy Certificates (RECs). Carbon offsetting is a way of investing in projects that reduce or remove carbon emissions, such as reforestation or clean energy projects.
The key to understanding and managing a company's environmental impact is assessing and reducing its carbon footprint. VALORES GLOBAL can assist companies in understanding their emissions sources and scope and developing strategies to reduce them, resulting in significant cost savings, improved energy security and a boost to their brand.
Sustainable practices can bring a wide range of benefits to companies, including financial, social, and environmental. In Vietnam, many companies are starting to adopt sustainable practices and are seeing the positive impacts on their operations and bottom line.
One of the biggest telecommunications firms in Vietnam, Viettel, is an example of a Vietnamese business that has effectively adopted sustainable practices. To reduce its impact upon the environment and improve its social responsibility, Viettel has undertaken a range of initiatives including:
Energy efficiency: Viettel uses solar power to produce electricity and has installed LED lighting as part of its energy-saving initiatives. These actions have assisted the company in lowering its energy usage and carbon emissions.
Reduction of waste: Viettel has reduced the quantity of waste it sends to landfills by implementing a waste segregation and recycling program. To lessen the usage of single-use plastics, the company also encourages its staff to utilize reusable water bottles and coffee cups.
Community involvement: Viettel has a strong focus on corporate social responsibility and has implemented a number of initiatives to support local communities. These include providing access to education and healthcare, as well as supporting small businesses and farmers through training and development programs.
The implementation of these sustainable practices has brought a range of benefits to Viettel. The company has seen financial savings from energy efficiency measures, as well as improved employee morale and engagement due to its focus on social responsibility. Viettel has also seen an increase in customer loyalty as consumers are more likely to support companies that are committed to sustainability.
Viettel is just one example of a Vietnamese company that has successfully implemented sustainable practices, and there are many others that are also seeing the positive impacts of sustainability on their operations and bottom line. If you are an SME that’s ready to start adopting sustainability practices, feel free to reach out to us for a discussion via the contact form.
Three examples of small businesses in Singapore that have implemented sustainability initiatives and the benefits they have reaped as a result.
Sustainability initiatives can bring a number of benefits to small businesses, including cost savings, increased competitiveness, a better reputation with customers and investors, and greater social and environmental impact. The specific benefits a small business in Singapore can achieve will depend on the specific sustainability initiatives it implements and the industry in which it operates.
The Hive: A small co-working space in Singapore, has implemented a number of sustainability initiatives, including the use of energy-efficient lighting and equipment, recycling and composting, and sourcing materials locally. This has enabled the co-working space to significantly reduce energy and resource consumption and has attracted a diverse group of businesses and individuals who appreciate the space's commitment to sustainability.
The Better Toy Store: A toy shop specialising in eco-friendly, non-toxic, and sustainable toys made from natural materials. By offering sustainable toys, the store has been able to stand out from the competition and attract environmentally conscious customers.
The Green Collective: The Green Collective, a small retail shop in Singapore, has implemented a number of sustainability initiatives, including using eco-friendly packaging, sourcing products locally and from sustainable sources, and reducing energy and water consumption in its operations. As a result, the shop has been able to significantly reduce waste and greenhouse gas emissions and has gained a loyal customer base that appreciates the shop's sustainability efforts.
Overall, these examples show that sustainability initiatives can be successful for small businesses in Singapore and lead to a range of benefits, including cost savings, increased competitiveness, better reputation among customers and investors, and improved social and environmental impact.
Problem: Increased operation costs due to high electricity rates
Since October 2021, prices of electricity have gone up by more than 400%, and the new norm is as high as S$0.30 per kilowatt-hour (compare this to $0.07- 0.10 before Oct 2021). As a result, businesses have seen the impact of the spike in operating costs.
Solution: Switch to renewable energy
The rise in electricity prices has led to an increased demand for renewable energy. Renewable energy rates have always been less competitive in the past. Now, with the volatility of the electricity prices, renewable energy can be used by businesses as a long term solution to hedge against the uncertain electricity prices, hence cutting costs in the long run.
With carbon tax increasing to S$25 per tonne by 2023, electricity price is likely to increase further as power companies may pass down the increased cost to consumers, making renewable energy an attractive alternative.
For SMEs with sizable roof spaces, these are the feasible options:
1. Invest in Solar PV Systems
2. Allow third party Solar PV developers to construct Solar PV Systems and buy the renewable energy from the developers via a power purchasing agreement (PPA)
3. Roof leasing to third party Solar PV developers
In the long run, SMEs will benefit from the switch. If you wish to find out more on implementing the switch, feel free to reach out to us for a discussion.
SMEs are increasingly aware of making sustainability a key part of their business and the importance of doing so. Yet, many are hesitating because of the lack of knowledge and resources to take action. Chances are, it’s not their fault because oftentimes, there is a perception that pursuing sustainability is an additional cost rather than an advantage that SMEs can build due to the expected cost and resources needed to implement sustainability initiatives.
However, SMEs can take steps to get started on becoming a more sustainable business without incurring too much cost.
Step 1: Find out how much is the current emissions
SMEs can start by addressing scope 1 and 2 emissions of the company. Scope 1 emissions refer to the direct emissions resulting from the company’s operation. Scope 2 emissions are indirect emissions resulting from the generation of purchased energy.
This would require a third-party assessment of the operational emissions and from electricity used, using the guidelines from either GRI or ISO standards.
If this is impossible to achieve due to resource constraints, the SME can start with assessing the emissions resulting from events or specific operations. For example, measuring the emissions resulting from a networking event that the company hosts.
Step 2: Assign a Lead
Sustainability is a long journey. The SME can start off this journey by assigning a lead who would be accountable to ensure follow-up and purpose to continue this journey to reach carbon neutrality.
Step 3: Transition to Green Energy
Shifting from fossil fuel generated power to renewable energy sources is the quickest way to reduce emissions. Using renewable energy like solar photovoltaic will stop emissions from the generation of energy from natural gas. Emissions stemming from the use of purchased electricity is classified as Scope 2 emissions. So, switching to using renewable energy resources can be the first thing that SME can do in becoming a sustainable company.
Step 4: Continue to practise energy savings
Energy efficiency is a way to help companies reduce energy consumption and costs. Increasing energy efficiency will also lead to a reduction in overall emissions.
SMEs can continue to improve energy efficiency through different ways like replacing older chillers with a more technologically advanced version, or using LED lights as much as possible for all lightings as it uses less electricity than conventional lightings.
In summary, SMEs can start small when getting on its path of transition. If you know an SME that does not know which is the best action they can take, feel free to contact us. At Valores Global, we specialise in providing solutions to SMEs that are looking to kick start their journey to becoming green.
1. SMEs are not responsible for the majority of carbon emissions.
While it is true that the larger firms are responsible for higher emissions, especially those involved in manufacturing, chemical processing and power generation activities, nobody is escaping the impacts of a changing climate. All businesses have a prime responsibility towards the environment.
No matter whether you are a big, medium or small company, you can start analyzing the impact your company has on the environment and developing strategies for reducing your carbon footprint. The sooner all companies can start reducing their emissions, the higher chance that we can prevent the rise of temperature by about 2 degree celsius.
2. Going carbon neutral is a costly exercise, and SMEs cannot afford it.
Implementing the necessary changes may seem complex and costly. In many cases, it may mean radically transforming processes, choosing new providers, creating new guidelines, and investing a lot of resources.
For example, sustainability reporting requires the different departments in the organization to understand their scope 1 and 2 emissions. Smaller and more cost-sensitive companies can start off with a basic exercise to benchmark their emissions by certain business functions. This can eventually be expanded to the entire organization over time.
3. There is no benefit for SMEs to reduce their emissions.
Many organizations view emission reduction as a Corporate social responsibility (CSR) activity, with little or no business benefits to the companies. This is untrue. In fact, one way to reduce emissions is to achieve more efficiency in the operations of business.
Moreover, most B2B SMEs providing services to the larger firms may not be aware that they are contributing to the scope 3 emissions of their customers. By reducing their own emissions, they are helping their customers with their Scope 3 emissions, which in turn will enhance relationships and business sustainability.
An organization that takes effort to reduce emissions can also position the company in alignment with the objectives of the new green economy, where preferential funding is available.
In the next post, I will share the steps that SMEs can take to reduce their carbon footprint. At Valores Global, we are aiming to achieve 1,000,000 ton emission reduction by 2023 and one way is through helping our clients take steps to becoming carbon neutral. If you are an SME looking to kickstart your journey to becoming carbon neutral, feel free to reach out for a discussion.
By ditching coal for biomass, Japan and South Korea are embracing false hope of a zero-carbon future
The assumption that burning biomass can replace or mitigate coal’s negative effects is not just questionable science, it is dangerously undermining coal phase-out plans in Japan and South Korea.
Last year, my colleagues and I [Tomos] took a close look at Britain’s biggest greenhouse gas emitter. It’s not a coal plant – at least not any more, really.
Since 2012, Drax Group has been transitioning out of coal; its last coal-fired plant is expected to shut down later this year. Drax is now the biggest biomass-based electricity producer in Europe – mostly using compressed wood pellets – thanks to what we estimate will be more than £10 billion (US$13 billion) in subsidies.
These subsidies are provided under the premise that burning biomass is carbon neutral, that all the carbon released from burning trees is reabsorbed when new trees are grown. This logic is no longer supported by the latest scientific evidence, which shows that burning wood for power is often not carbon neutral, and can be more polluting than coal.
Our recent analysis found that Drax is the biggest emitter in Britain, pumping out 13.2 million tonnes of carbon dioxide from its chimneys in 2020. This also makes it the European Union’s fourth-largest carbon dioxide emitter among coal plants when biomass emissions are included.
Reaching net-zero emissions by 2050 — and thus limiting the rise in global temperatures to 1.5°C above pre-industrial levels — implies profound economic and societal shifts. According to a new report, a successful transition would have six key characteristics.
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“The Frontiers Report identifies and offers solutions to three environmental issues that merit attention and action from governments and the public at large,” said UNEP Executive Director Inger Andersen.
Noise, Blazes and Mismatches: Emerging Issues of Environmental Concern, the sixth report, draws attention to emerging environmental concerns with the potential to wreak regional or global havoc, if not addressed early.
The world’s most relied-upon renewable energy source isn’t wind or sunlight, but water. Last year, the world’s hydropower capacity reached a record 1,308 gigawatts (to put this number in perspective, just one gigawatt is equivalent to the power produced by 1.3 million race horses or 2,000 speeding Corvettes). Utilities throughout the globe rely upon hydropower to generate electricity because it is cheap, easily stored and dispatched, and produced with no fuel combustion, meaning it won’t release carbon dioxide or pollutants the way power plants burning fossil fuels such as coal or natural gas do.
As with other energy sources, however, hydropower is not without an environmental cost. Beyond the profound ecosystem impact of damming and diverting huge waterways, hydropower can wreak havoc on native aquatic species and their ecosystems. The majority of watersheds around the world – some of which have operated on hydropower for more than a century – are highly degraded, with polluted waterways and outmoded technology. Traditional reservoirs are often stagnant bodies of water; because of this, they are frequently sites of harmful algal blooms, or HABs, which are toxic to people, fish, shellfish, marine mammals and birds.
As well as profoundly altering the watercourse, large hydro dams can be a death-zone for fish. As well as obstructing their migratory routes, the fast-spinning turbine blades can cut them. If they make it past the blades, sudden changes in pressure can kill the fish, as can shear forces during passage through the turbine.
The World Shipping Council, the Washington, D.C.-based trade association representing international liner shipping, is sharing for the first time concrete regulatory and economic pathways that it believes the International Maritime Organization must take up in order for the shipping industry to achieve zero carbon emissions.
The WSC has identified six regulatory and economic pathways forward, which WSC says are critical for the nations of the UN International Maritime Organization (IMO) to address for a successful maritime energy transition.
Climate change: Renewable energy to meet over 70 percent of China’s additional power needs in next three years, says IEA