THIS month is indeed probably the most active month in Singapore's sustainability journey, in which we saw the ecosystem taking a coordinated inter-generation effort to create sustainable growth for our beloved little red dot.
Ecosperity Conference, organised by Temasek, is taking the charge and is now in its sixth year. This year's event is the biggest in bringing various parts of the ecosystems to create a sustainable future. The annual Business China and Global Traders Summit (the latter organised by Enterprise Singapore) have also now put sustainability as their top agenda for the first time.
Indeed, as the global trade dynamics is changing rapidly, fanned by the US-China trade war, the ecosystem should make sure that global trade remains a force for sustainable development. Our trade sector is three times that of our GDP and, together with the related finance, energy and logistics sub-components, it provides an important anchor for sustainable economic prosperity and job creation. Encouraged by the Singapore government, more than 100 trading companies have set up shop here in the last five years.
Responsible trade requires a wide range of efforts. To begin with, we must all make sure that we track and report our greenhouse gas emissions. At Trafigura - one of the world's largest commodity trading and logistics companies - we recently announced that we will require ship owners to disclose information that will allow us to track how much fuel is consumed per tonne of cargo. This is one of many small but necessary steps towards the reduction of greenhouse gas emissions.
Once it is clear what the emissions are, we need to consider actions to reduce these emissions. A wide range of such actions is required for responsible chartering - from investing in modern ships and renewable energy supplies, to cleaner fuels and smarter logistics - to reduce the climate impact of moving goods around the world.
Supported by the Maritime Port Authority of Singapore, the 35 oil tankers (and four gas ships) we purchased recently have been fixed with scrubbers - and they have joined the local maritime tonnage as Singapore-flagged fleet. Our first ship is named "Marlin Singapore".
We are at the start of not just an energy transition towards low carbon solutions, but also a commodities transition. Our societies will require large quantities of commodities such as cobalt and aluminium to enable this energy transition. Companies like ours will need to use our financial and logistical trading capacity to efficiently bring the resources required from where they are plentiful to where they are needed, in a way that is sustainable.
This transition to a lower-carbon economy will bring disruption and dislocation. Responsible sourcing will be a key step. We need the mines and plantations to be better integrated with the logistic system, just like in the coffee sector. These are things that we traders understand and are trained to navigate.
At times, companies can act on their own in reducing the climate impact of their activities. Other times, it will require collective corporate actions, with the government taking the lead. The Singapore government and governments around the globe can take actions to help companies in this journey. This requires long-term planning and working closely with the ecosystem because many of the costs are externalities that are hard to be internalised in the balance sheets of companies. There is a need for good regulation, environmental protection and a predictable carbon pricing regime.
Singapore has much to celebrate in its bicentennial this year. It has developed into a remarkable global trading hub beyond the widest dreams of its founder Sir Stamford Raffles and first British Resident and Commandant Major-General William Farquhar.
Since Trafigura has moved our registration here, we have deepened our ties with the region and doubled our global revenue in the last four years. Asia and the Middle East now contribute to the bulk of the growth. Surprisingly to many, China is now taking the lead in this sustainable journey and, given that we are in the same time zone, the ecosystem here has the unique chance to leverage this commodities transition.
Frankly, most of us spend too much time on what is urgent and not on what is most important. As I said at the Global Traders Summit in my speech, we have to start this journey for the sake of our children.
- The writer is regional CEO and a member of the Climate Change Group in Trafigura Private Limited, among the world's largest global companies based in Singapore.