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DOES ESG REALLY MATTER?

ESG, or Environmental, Social, and Governance, is more than just an acronym; it represents a set of critical criteria that investors consider when they search for and filter “socially responsible” companies.

Source: INSIGHTS: ESG & Green Buildings: Should They Be an Investment Focus? 27 August 2022


ESG’s Importance:

In recent years, ESG has gained significant importance, demonstrating its profound influence on the longevity of a business. Companies that focus on ESG report on a comprehensive range of factors, including supply chain management and long-term sustainability. These aspects are of paramount significance to investors who wish to make informed choices when investing in a company.

A Strong ESG Proposition Links To Value Creation in 5 Essential Ways:

Top-Line Growth: ESG practices can help companies attract B2B and B2C customers by offering more sustainable products. Strong ESG performance can also lead to better access to resources through improved community and government relations.

Cost Reductions:

Sustainable practices can contribute to lower energy consumption and reduced water intake, thereby decreasing operational costs.

Productivity Uplift: ESG initiatives can boost employee motivation and attract top talent by enhancing an organization’s social credibility.

Regulatory and Legal Interventions: Companies that align with ESG principles may benefit from greater strategic freedom due to deregulation and can earn subsidies and government support.

Investment and Asset Optimization: ESG practices can lead to enhanced investment returns by directing capital toward more sustainable solutions such as sustainable plants and equipment, avoiding investments that may not pay off due to longer-term environmental issues. Source: Henisz, W., Koller, T., & Nuttall, R. (2019), Five Ways that ESG Creates Value Singapore Green Building Masterplan (SGBMP): In Singapore, the Singapore Green Building Masterplan (SGBMP) is a notable initiative designed to achieve the “80-80-80 in 2030” targets:

  1. Green 80% of Buildings : The plan aims to accelerate the transition to green buildings, targeting 80% of all buildings by 2030.

  2. Super Low Energy (SLE) Buildings : The SGMP intends for 80% of new developments by Gross Floor Area (GFA) to be Super Low Energy (SLE) buildings starting in 2030.

  3. Energy Efficiency : The plan seeks to attain an 80% improvement in energy efficiency for best-in-class green buildings by 2030.

Source: Green Buildings Masterplans.(n.d). BCA Corp

Launched in March 2021, the SGMP is part of the Singapore Green Plan 2030. This comprehensive strategy demonstrates the commitment to environmental sustainability, responsible governance, and social well-being.

Clearly, ESG investing is undoubtedly here to stay, alongside the growing trend of green buildings. These trends will have a lasting and positive impact, increasing the demand for high-quality real estate that is environmentally sustainable and contributes to the well-being of communities, ensuring a brighter future for generations to come.




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