In this year’s ESG Monitor, Singapore took the top spot for having the highest levels of awareness and knowledge of the term “ESG”.
72% of Singaporean participants were aware of the term and 31% claimed to have a good understanding without being prompted. These numbers compared favourably to the global results of 46% and 41% respectively.
These results could be seen as a sign of the efficacy of local ESG policies and initiatives. The government recently committed to shorter timelines for reducing greenhouse gas emissions, with accelerated targets for achieving peak and net-zero emissions. Awareness campaigns like the Green Plan 2030 and environmental policies such as carbon taxes have also been widely discussed in Singapore media. ESG-related disclosures and climate reporting continue to be key focus areas for corporates and regulators alike, with the Singapore Exchange introducing a phased approach that listed companies have to follow in relation to such disclosures. Corporates, too, have stepped up their emissions-related goals, disclosures, and investments in green innovations.
Yet, for all the attention that Singaporeans pay to ESG issues, there is a distinct disconnect between the people’s desire to support these issues and their willingness to pay for ESG. While 62% of Singaporean participants said sustainability factors actively influence their purchasing decisions, only 46% would be willing to pay an ESG premium, and only 45% were prepared to receive lower investment returns from companies with stronger ESG performance. Interestingly, 71% of Singaporean respondents also said that companies should not pass on the costs of improving their ESG performance to customers.
It is likely that consumers will continue to incur a green premium for sustainable products and services, at least until green innovations and processes build up sufficient critical mass to gain economies of scale. In view of the rising cost of living, affordable pricing will be crucial in moving the needle and converting consumers’ good intentions into action.
As companies race towards their net zero emissions goals, those which can develop and provide affordable and effective green solutions for consumers will emerge as winners.