1. I am happy to join you today for the 2019 Singapore Apex Corporate Sustainability Awards. Tonight, we recognise companies that have exhibited a strong sense of corporate sustainability in the way they run their businesses.
2. I was thinking about the past few years and what were some of my proudest personal achievements. It is not removing exams or phasing streaming in secondary school. But I think one of my proudest recent personal achievements is that I now exercise every day, and have been doing so for a couple of years. I exercise at least 30 minutes every morning and I strongly recommend it – stretching, strengthening, or maintaining cardio-vascular fitness. It has replaced an earlier routine of running or going on the elliptical machine for an hour, twice or thrice a week.
3. This new habit did not come easy. When I first started, it interfered with so many things I wanted to do in the morning – starting from reading the papers, checking social media, eating my breakfast, lying a little longer in bed, or checking the emails that came in overnight. I had to consciously yank myself away from all these activities, and focus on the 30 minutes of exercise. Today it has become a habit. I was told it takes 28 days to develop a habit. I've been at it for over a month and from something I forced myself to do, it is now something I cannot do without, and as a result I think I am healthier, and less injury-prone – hopefully for the long term.
4. It is a fact of life that immediate and short term distractions compete with things we need to do for our long term good, but for which there is no immediate payback. To overcome this at a personal level, we need to develop good habits, like exercise. We encounter such trade-offs at work and in our organisations too. Organisations can also develop good habits, but I think we have a different word for it – and it is called institutionalisation. That means to put in place good corporate practices that make sure we pay attention to long term issues. Hopefully, over time these good practices become entrenched.
5. In short, I think this is what corporate sustainability is about. It is to combat unhealthy short termism, because day to day pressures will veer us to activities that are urgent, but actually not that important. We need to make a deliberate and disciplined effort – whether through the design of Board agendas, corporate planning cycles or publication of sustainability reports or the way we design our portfolio investments – so that we do things that are important and for the long term.
6. Today, I believe most corporates are conscious of the various aspects of sustainability and its holistic concept. Business sustainability is about long term competitiveness, where the company constantly refreshes and renewsits products and services to continually win over customers and stay competitive. Financial sustainability ensures that risks are well managed and cash flows continue flowing People sustainability involves developing capabilities to grow your own timber and attract outside talent at the same time, so that there is a good combination of perspectives and abilities to lead the company into the future.
7. Sustainability is an evolving field. Tonight, let me share with you three issues which I think will in time deserve some attention in this discussion on sustainability. Like business, finance and people sustainability, they will involve choices between short term gains and the long term health of organisations.
8. The first is technology. We are already seeing the advent of technology, whether it is Artificial Intelligence (AI) or robotics, that promises manpower savings or greater capabilities. It reminds me of the earlier craze called 'outsourcing' where functions that were non-essential and did not represent companies' core competencies were parcelled out to external vendors. The short term savings were attractive, and the practice therefore carried away into excess. Many organisations lost control over the outsourced activities, quality control was compromised, and in some instances, even core competencies got outsourced. I think today we see a healthier situation, where management exercises careful judgement over what should be outsourced, and what should be retained in-house.
9. Similarly, in the deployment of AI and robotics, an organisation can blindly adopt them for short term manpower and cost savings, or stubbornly reject them because they represent an uncomfortable change from the status quo. What we need to do is to take a longer term view and recognise that we will not be an economy of just robots and computers, and we shall be a predominantly human-driven economy. We then need to figure out how humans and technology can complement each other and work together, through carefully thought-out business models and processes. I believe this will be a major undertaking of sustainability in the coming years.
10. The second area is social inequality. Unlike many places in the world, inequality is not worsening in Singapore. In fact, in Gini Coefficient terms, it is improving. But what worries us is the slowing down of social mobility, especially inter-generational social mobility.
11. One of our key national responses is SkillsFuture. Its starting premise is that we will be a human-driven economy, provided that Singaporeans have the right skills to contribute. Given that, employers need to define their skills requirements clearly and explicitly, and the credentials that they are looking for in their employees. Certain credentials can be met through formal education qualifications, such as degrees and diplomas, but other credentials can be fulfilled through alternate avenues too, such as professional training, work portfolios, or very importantly, experiences.
12. So again, to take a longer term view, organisations need to embrace the concept of a broader meritocracy, so that they do not make human resource decisions based on one traditional academic yardstick, but demonstrations of a range of skills and strengths. I believe such an approach better meets the long term skills requirements of the company, and ensures that we maximise the potential of as many Singaporeans as possible.
13. The third area is environmental sustainability. I think this is the hardest element of corporate sustainability to achieve, because action or inaction does not easily translate into direct benefits and costs that can be felt by the company or its shareholders. This is a classic phenomenon of the tragedy of the commons, where we act for our own self-interests and in the process, degrade the common good.
14. The Government can help to internalise some of the benefits and costs, through incentives given to environmentally conscious companies, or impose a cost such as the petrol tax or carbon tax. These measures encourage businesses to put a dollar value on creating their products or services in an environmentally sustainable manner, and factor that into their business decisions.
15. Other than governmental measures, we need a broader concerted effort – one that goes beyond institutionalising best practices in organisations, to habitualising them at an individual level. It means employees wanting to do their part to preserve the environment and opting to join companies that are more environmentally conscious; consumers voting with their pockets to buy more environmentally-friendly products and services.
16. My hope is that we are able to reverse the argument from today's 'my little waste does not make a difference' to an argument that says that 'our collective effort is significant and makes an impact'. Singapore contributes only 0.1% of the world's carbon footprint. We cannot change the world but maybe we can inspire them.
17. I want to thank the Global Compact Network Singapore today for organising this award ceremony. In its fourth year, the awards help recognise businesses for their achievements in corporate sustainability, especially those who are breaking new grounds. I wish I can help you boast about these companies and their best practices, but I understand this is like the Oscars or Academy Awards, where we know who the nominees are, but not the winners. Notwithstanding, I congratulate all the nominees and awardees for your achievements. Thank you.