hygiene and impact factos sustainability reporting

Beyond basics: Hygiene & impact factors in sustainability reports

The last decade saw a remarkable increase of interest in companies’ sustainability or environmental, social and governance (ESG) performance by investors, regulators, and consumers.  The charts below show the increasing demand from investors and regulators alike for companies to report on their ESG issues.

UN PRI Signatories growth

Number of signatories to the UN Principle of Responsible Investment (UN PRI).  Image from UN PRI

10 year progress on exchanges ESG requirements

Image from 10 Years of Impact and Progress, SSE (2019)

 

When the impacts of the pandemic first made waves through the global economy, many questioned if the momentum for sustainability will be put to a halt as societies and economies move into crisis survival mode and focus on rebuilding economies. However, with COVID-19 dubbed a “stress-test” on business resilience, ESG and sustainability practices have become evermore crucial for companies to manage their non-financial risks. BlackRock also noted that sustainable funds have been able to weather the pandemic storm and financial returns outperformed peers in the first quarter of 2020. Specifically, global sustainable mutual funds and ETFs had inflows of $40.5 billion in the first quarter, up 41% from the same year-earlier period[1].

“These inflows during a period of extraordinary market drawdown suggests a persistence in investor preferences toward sustainability,” BlackRock said. “They upend an oft-cited concern pre-Covid crisis that during sharp market downturns, investors will de-prioritize sustainability.”

Even in such extraordinary times, ESG issues and sustainability has proven yet again to be here to stay.

As sustainability / ESG reporting evolves and is now more mainstream than ever before, how can companies take this opportunity to go beyond ticking boxes, meeting regulatory requirements, and on to creating more meaningful impact?

Based on several reports and upcoming trends, we have identified disclosures that companies today should be reporting on (Hygiene Factors), and other metrics that shows a company is creating wider impact (Impact Factors).

Hygiene Factors (“must-haves”)

The International Business Council (IBC) along with the World Economic Forum (WEF) launched an initiative to “identify a core set of material ESG metrics and recommended disclosures that could be reflected in the mainstream annual reports of companies on a consistent basis across industry sectors and countries”. In January 2020, WEF prepared a report[2] proposing a set of 22 well-established, quantitative core metrics and reporting requirements. These factors were defined as “core” based on information currently popularly being reported on or information which should be easily obtainable by companies.

Core Metrics for Sustainability Reporting_Adapted from WEF

Adapted from Toward Common Metrics and Consistent Reporting of Sustainable Value Creation, WEF (2020)

The metrics and disclosures proposed here have been organized in four pillars that are aligned with the SDGs and principal ESG domains: Principles of governance, Planet, People and Prosperity. They are drawn wherever possible from existing standards and disclosures (such as the Global Reporting Initiative, Sustainability Accounting Standards Board, Task Force on Climaterelated Financial Disclosures etc.)

More details on the 22 metrics can be expected by the end of 2020.

In Singapore, the top 10 most disclosed Material ESG Factors by listed issuers also mirrors the 22 metrics proposed by the WEF[3].

Top 10 Material Issues Disclosed in Singapore

Image from Sustainability Reporting – Progress and Challenges, SGX & CGIO (2019)

Globally, these are the top material issues reported on by member companies of the World Business Council for Sustainable Development (WBCSD)[4].

Priority material issues of WBCSD companiesImage from Reporting matters, WBCSD (2019)

 

From the observations above, robust disclosures on issues such as good governance and ethics, climate change management (TCFD-aligned), ecosystem impacts, employee health, safety and wellbeing, and an organisations’ wider contributions to community/social development have become common practice. As investors and regulators increasingly look for comparability between companies and as quality of reports improve, basic disclosures on these “hygiene factors” will be expected of companies within their reports.

Additionally, in the COVID-era, we can also expect increased focus on social disclosures, particularly on expansion of employee workplace safety.

Impact Factors

Besides these “must-have” factors, there are other issues organisations can look at within their sustainability strategy to strengthen impact. These Impact Factors may not necessarily be separate material topics. In most cases, these are a strengthening of disclosures around similar material issues.

In the same report by the WEF, further 30 “Expanded Metrics” were proposed[5]. These metrics have “wider value chain scope or convey impact in a more sophisticated or tangible way, such as in monetary terms. They represent a more advanced way of measuring and communicating sustainable value creation, and companies are encouraged to report against them as well, when material and appropriate.”

Some notable metrics and disclosures include,

Extended Metrics for Sustainability Reporting_Adapted from WEFAdapted from Toward Common Metrics and Consistent Reporting of Sustainable Value Creation, WEF (2020)

For the full list of “Expanded metrics”, please see refer to the report.

Other key disclosures could stem from emerging trends in sustainability, particularly in the expected role of business within these trends. These include technology breakthroughs for climate mitigation, inevitable climate change adaptation, circular solutions, sustainable consumption, supply chain transparency and sustainability, biodiversity protection, and sustainable finance[6], among others.

Leadership

Ultimately, what defines leadership is not reporting on a large laundry-list of material factors, but rather, in doing it well. Many reports, publications and studies[7],[8],[9],[10] have emphasised the importance of key principles and aspects of best-practice sustainability reporting. They include clearly stating the purpose of the organisation, defining material issues from stakeholder engagement and operating context, balanced reporting, strengthening alignment with global reporting and sustainability frameworks (GRI, SASB, TCFD, SBT, SDGs etc.), articulation of board responsibility, and integrating ESG risks and opportunities within the wider business model. Paia specailises in applying these principles to individual client circumstances, and working with clients to produce leading edge reports with impact.

 

Paia has a long track record of helping companies with their sustainability strategy and reporting. Do take a look at our areas of expertise here, or reach out to us if your organisation is looking for support on your sustainability journey.

 

[1] https://www.bloomberg.com/news/articles/2020-05-18/blackrock-joins-allianz-invesco-saying-esg-funds-outperformed

[2] https://www.weforum.org/whitepapers/toward-common-metrics-and-consistent-reporting-of-sustainable-value-creation

[3] https://api2.sgx.com/sites/default/files/2019-12/Sustainability%20Reporting%20-%20Progress%20and%20Challenges.pdf

[4] https://www.wbcsd.org/Programs/Redefining-Value/External-Disclosure/Reporting-matters/Resources/Reporting-matters-2019

[5] https://www.weforum.org/whitepapers/toward-common-metrics-and-consistent-reporting-of-sustainable-value-creation

[6] https://sustainability.com/wp-content/uploads/2020/01/sustainability-annual-trends-2020-1.pdf

[7] https://www.forbes.com/sites/deloitte/2020/01/21/why-doing-good-is-good-for-business/#3c1698416b29

[8] https://globescan.com/wp-content/uploads/2019/07/GlobeScan-SustainAbility-Leaders-Survey-2019-Report.pdf

[9] https://www.wbcsd.org/Programs/Redefining-Value/External-Disclosure/Reporting-matters/Resources/Reporting-matters-strategy-targets

[10] https://api2.sgx.com/sites/default/files/2019-12/Sustainability%20Reporting%20-%20Progress%20and%20Challenges.pdf

economic recovery or climate action

Economic Recovery or Climate Action? Why Not Both?

By Adrian Pang

The raging COVID-19 pandemic that has gripped the world like a whirlwind, and social upheavals that have morphed into different beasts in different countries across the world have truly elevated the prominence of the “S” in ESG in a tumultuous 2020.

It is undeniable that these two events will fundamentally change how societies and the world organises and works. Social consciousness on public health and diversity have reached new heights. Even so, the pandemic and global economic fallout have slightly shifted primary discourses away from climate actions and environmental responsibilities – from momentum to transition to green economies and sustainable business models, to now focus on economic survival and resilience. In the short term, there are expected reductions of resources and budgets for sustainability due to economic fallout from the pandemic. But short-term economic recovery plans are insufficient to building long-term business resilience to face considerable climate risk.

Institutions need to create more socioeconomically and environmentally responsible strategies that address systemic changes required to transition to a low zero carbon global economy simultaneously with issues of human rights, racial, income and gender inequality, and overall health and wellbeing. Sustainable/Green Finance can be a substantial driver to lead a post pandemic world that values the wellbeing and survivability of the environment and society.

What is Sustainable/Green Finance

While there is not a formalised definition, green financing is generally perceived as financial flows (from banking, micro-credit, insurance, and investment) prioritising ESG risks and opportunities while still ensuring decent, if not positive rate of return. Green financing values social and environmental factors, impacts and sustainability. [1] It also brings accountability in business and financial decisions and strategies for the future. As the global economy reels from the pandemic, green financing is making significant headway into economic recovery plans. Entities in the public, private and not-for-profit sectors are encompassing this financial paradigm shift into their business continuity plans and economic resilience strategies.

Green Finance in Post-COVID 19 World

The COVID-19 crisis is seen as a rude awakening and a major stress test for the world’s social and financial systems to prepare for the long-term climate crisis. It is understandable that financial interventions and stimulus packages by countries need to address short-term health and economic weaknesses. However, governments should also strive to reshape ecosystems, investments, and production and consumption patterns through green financing to realise a resilient, and sustainable recovery as well as future. [2] The Financial Times argues that cost of climate inaction would amount to a staggering $600 trillion by 2100. This is inevitable at the current trajectory, as the world will not see its carbon emissions halved by 2030 as set out by the Paris Agreement. 2030 is also the expected year of climate tipping point – the point of no return for the climate crisis. Therefore, drastic measures like Green Finance are required now to make systemic changes in the post pandemic world.

The World Bank has recently published a guide for financial regulators in emerging economies to scale up green finance in their countries. [3] The guide can help financial institutions to structure and refine green finance products (e.g. loans, credits, and guarantees) as well as encourage investors to invest in impact investments opportunities that comply with sustainability criterions. The European Union is pushing for a Green Deal for economic recoveries post pandemic. The regional bloc has set up a new “Green Recovery Alliance” that brings together politicians, CEOs, NGOs, think tanks and subject matter experts across the continent to identify and drive green finance and investments. Elsewhere, the slogan “Build Back Better” is increasingly a catchphrase for many governments to tailor their economic recovery strategies to incorporate low-carbon and clean economic developments. Hong Kong and China have implemented mandatory ESG disclosure for companies while French bank Natixis voluntarily incorporated climate risk into its credit decision-making process. [4] South Korea has also pledged to a “Green New Deal” as it recovers from the COVID-19 induced economic losses. [5] Overall, there are encouraging signs that countries are embarking on the green path to economic recoveries.

Moving Forward and Organisations’ Roles

The conundrum between prioritising economic recovery or climate action remains needlessly real. Indeed, countries in Asia, of which many are emerging economies remain reliant on restoring traditional economic and financial fundamentals (which are often carbon intensive) to reboot their economies. [6] This is counterproductive to global progress made on the sustainability front.

2020 is on course to record the largest drop of GHG emissions, estimated at 8% year on year. [7] However, this reduction is due to enforced lockdowns and decreased traffic volumes globally and it is likely to be an one-off anomaly post-pandemic. The world needs to achieve at least 7.6% reduction annually between 2020 to 2030 to keep global temperature increase to less than 1.5 degree Celsius by the end of the century.

The bottom line remains, we need to protect the Earth now more than ever. The pandemic is a good reset for how things work. In fact, the world is ready for a paradigm shift on green finance where climate and sustainability elements can closely entwine with economic recovery and development.

Companies and organisations also have significant roles and responsibilities in realising more sustainable development and popularising green finance post COVID-19. Some possible actions are: working with governments to stimulate green recoveries, supercharging corporate resilience and prioritising climate risks, bailouts or financial tools with sustainability strings attached, enhancing ESG performance and disclosure, altering business models and practices, and identifying sustainable values in business deals and developments.[8] All these potential strategies can involve and abide by values of green financing. We have seen a strong push for the big “S” in 2020, let us also push for the big “E” and “G”.

Reach out to us to find more about how you can enhance your sustainability/ESG strategies and performances as well as how green financing could work for your organisation or business.

[1] https://www.cbd.int/financial/gcf/definition-greenfinance.pdf

[2] https://www.unenvironment.org/regions/asia-and-pacific/regional-initiatives/supporting-resource-efficiency/green-financing

[3] https://www.esi-africa.com/industry-sectors/finance-and-policy/world-banks-guide-to-scale-up-green-finance-in-emerging-markets/

[4] https://www.eco-business.com/news/what-is-green-finances-role-in-the-covid-19-recovery/

[5] https://www.reuters.com/article/us-southkorea-environment-newdeal-analys/jobs-come-first-in-south-koreas-ambitious-green-new-deal-climate-plan-idUSKBN23F0SV

[6] https://asia.nikkei.com/Spotlight/Asia-Insight/Asia-risks-missing-green-economic-reset-after-coronavirus

[7] https://earth.org/green-economy-post-covid-19-economic-imperative/

[8] https://www.strategy-business.com/article/The-environmental-opportunity-created-by-COVID-19?gko=0051f

gender-responsible-procurement

Gender responsible procurement

By Sanjala Hari

Recently, global movements on non-discrimination, human rights and equality have brought a strong focus on how companies are looking at inclusivity and equality in their workplace. Apart from racial and ethnical diversity, removing any biasness against gender in the workplace has also contributed to having in inclusive team. A few companies are now looking beyond empowering women in their own workforce to also include such considerations during their procurement processes. Gender responsive procurement is now gaining traction, and many see the benefit in enabling purchase of gender-sensitive goods and services and supporting women-owned businesses.

WHAT IS GENDER RESPONSIBLE PROCUREMENT?

A few companies are now looking beyond empowering women in their own workforce to also include such considerations during their procurement processes.

The UN Women define gender responsive procurement as ‘the sustainable selection of goods, civil works or services that takes into account their impact on gender equality and women’s empowerment’. By enabling gender responsive procurement, companies support the elimination of discrimination against women by treating male and female suppliers on equal terms. Gender responsible procurement aligns with Sustainable Development Goal (SDG) 5, although there are specific targets related to women and girls in SDG 12 of the SDG 17 goals. Gender-responsive procurement also aligns with one of the seven drivers identified by the UN High-Level Panel on Women’s Economic Empowerment.

WHY SHOULD COMPANIES CONSIDER GENDER RESPONSIBLE PROCUREMENT?

Gender responsive procurement practices have had a positive impact on profitability and return on investment.

Women owned businesses today contribute significantly to the global economy. According to Global Entrepreneurship Research Association report in 2014, there were approximately 224 million women entrepreneurs worldwide. Women were also involved in over 80 percent of purchasing decisions worldwide (Dalberg, 2014). According to World Bank, in 2012, 35% of all small and medium enterprises (SMEs) are owned by women. Supporting women entrepreneurs has its own benefits. A study by McKinsey in 2015 confirms that gender-responsive procurement practices have had a positive impact on profitability and return on investment. The report also indicated that if women played an identical role in labour markets to that of men, as much as USD 28 trillion, or 26 percent, could be added to the global annual Gross Domestic Product by 2025.

WHAT ARE THE BARRIERS FACED BY WOMEN PARTICIPATION IN BUSINESSES?

Despite the various benefits of supporting women entrepreneurs, women owned businesses lag behind businesses owned by men due to various socio-cultural challenges, and/or economic and legal inequalities. Social and cultural expectations and unequal distribution of responsibilities persists for women even after they enter the workforce or start a business. Women also face challenges in access to financial capital, social and human capital. Women face challenges in acquiring collateral to start a business as they might have less access to financing than men in certain geographies. Similarly, some research shows that women find difficulty in establishing business networks and connections. Due to unequal preference to education among genders in certain geographies, women often lack the managerial experience to start a business.

WHAT CAN COMPANIES DO TO PROMOTE GENDER RESPONSIBLE PROCUREMENT?

The foundation of public procurement is on the principles of equality, non-discrimination and transparency. Public procurement has a large potential to promote gender responsible procurement. Companies can allow inclusion of gender criteria during assessment of proposals submitted. Companies can evaluate the proposals submitted based on criteria such as whether the project team is gender-balanced, and balanced presence of women and men in decision-making positions.

Companies can expand their network and business relationships to target businesses that are primarily women-owned

Companies can expand their network and business relationships to target businesses that are primarily women-owned – which could include small and medium size businesses run by women entrepreneurs. This would also include companies to fit technical, financial and other prequalification and qualification requirements based on the size and complexity of the opportunities, such that women-owned SMEs are not blindly eliminated during the procurement process. For unsuccessful bidders, providing a useful feedback on their strengths and weaknesses can help provide opportunities for improvement, especially for women owned businesses.

For businesses looking to diversify their overall supply chain and possibly reduce their spending on suppliers, procuring from women owned business could be the answer. Similarly, incorporating gender sensitive requirements during procurement process and engagements can not only support your company’s commitment towards gender equality, but also help companies mitigate any risks on gender discrimination or abuses in supplier operations.

Reach out to us to find out more about how you can include gender considerations in your procurement processes. More on our supply chain services .

gri-standards-2020-update-waste

GRI Standards 2020 update: Waste

In this article:

  • Introduction
  • Waste-related impacts
  • Circularity Measures
  • Reporting on quantitative data using revised Waste Standards
  • Circularity tools

Introduction

The Global Sustainability Standards Board (GSSB), GRI’s independent standard-setting body, released a revised Waste standard in May 2020. It is effective for reports published on or after 1 Jan 2022, although earlier adoption is encouraged.

The revision of GRI Standards is done on an ongoing basis to reflect the most recent trends and developments of environmental and social issues in the Standards. In 2018, GSSB revised the standards for Water and Effluents and Occupational Health and Safety. In 2019, a new standard for Tax transparency was released.

In particular, the revised waste standard replaces the older version which was based on an older paradigm in which waste was assumed to have no economic value. The revised standard also encourages disclosure relating to circularity. Organisation are now required to report, among others:

  • significant actual and potential waste-related impacts (GRI 306-1),
  • actions, including circularity measures, taken to prevent waste generation in the organisation’s own activities and upstream and downstream in its value chain, and to manage significant impacts from waste generated (GRI 306-2)

In this article, we discuss two key terms used in the standard in more detail: “waste-related impacts” and “circularity measures”. For more experienced GRI users, we have also summed up the changes in quantitative information required in the revised Standard.

 

Waste-related Impacts

Waste-related ‘impact’ refers to the effect of the waste generated by an organisation on the economy, the environment, and/or society.

Typically, organisations consider their waste generated in their operations and sometimes in their supply chain. In life cycle thinking, organisations also take into account the end-of-life of their products and services, and as a result their (waste) responsibility and impact do not end at the point of sale, but the point in time when the customer no longer finds value in the product. They would think about the amount of waste they pass on to their customers.

Waste-related impacts on people and the environment would depend on how the waste is transported, where it ends up and how it is treated (or not). GRI for instance gave the example of threat of marine pollution resulting from leakage of discarded plastic packaging into waterbodies. In Singapore, for example, many organisations do not know what happens to their waste or recyclables after they are being collected by third-party waste collectors, and therefore have little visibility on their waste impact at the disposal stage. GRI now requires organisations that engage a third party to manage its waste to describe “the processes used to determine whether the third party manages the waste in line with contractual or legislative obligations”.

To start understanding your waste-related impacts, you could start collecting data on the amount of materials used and waste generated in your value chain, as well as the properties of these inputs and outputs that limit or enable their recovery (e.g. reuse, recycle) or durability.

 

Circularity measures

To understand the concept of circularity, first consider a typical production process: raw materials are taken from the environment, produced into goods and services, used by consumers, before it is thrown away as waste. In this linear model, the value of the materials becomes lost at the end of its use. In a circular model, on the other hand, the value of the materials gets retained as long as possible, through measures such as reusing, remaking or recycling. These circularity measures are better for the environment because by keeping materials in use as long as possible, they prevent waste accumulation and resource depletion.

linear-vs-circular-economy

Source: Paia Consulting, adapted from Catherine Weetman (2016)

 

Tracking material flow(s) forces an organisation to examine its value chain – activities that convert input into output by adding value. Typically this gives better clarity on the life cycle of your products and services, including your inputs and suppliers upstream, and your outputs and customers downstream. Such life cycle thinking not only helps organisations identify causes of waste generation but is also an opportunity to improve process efficiencies and rethink business models.

 

Reporting on quantitative data using revised Waste Standards

For experienced GRI users, here are the key changes:

 

1. Effluents are no longer reported under “waste”
For organisations reporting on water discharge or effluents (2016 GRI 306-1 or 306-5), to report them under the 2018 GRI 303: Water instead of the 2016 GRI 306: Waste and Effluents.

For organisations reporting on spills, to continue reporting under the 2016 standard, but to look out for the upcoming Spills and Leaks standard that will be developed in the next few years. The indicator (2016 GRI 306-3) will be withdrawn on 1 Jan 2022.

 

2. Waste data is to be broken down into generation (306-3), diverted from disposal (306-4) and directed to disposal (306-5), reflecting the waste management hierarchy
GRI introduces the waste management hierarchy in this standard. Waste prevention, or waste reduction, is the most preferable option in the hierarchy, as it prevents the resulting impacts on the environment and human health. It is then followed by followed by recovery operations that divert waste from being sent to landfill or incineration, such as preparation for reuse, recycling. Disposal is the least preferable option in the waste management hierarchy as it is associated with the most negative impacts on the environment.

waste-manangement-hierarchy-epa

Source: EPA

Under each waste management option, the revised standard has a few broad categories for disposal methods:

  • Diverted from disposal, by recovery operations such as:
    • Preparation for reuse
    • Recycling (includes downcycling, upcycling, composting, or anaerobic digestion)
  • Directed to disposal, by operations such as:
    • Incineration (with energy recovery)
    • Incineration (without energy recovery)
    • Landfilling

To note, the definition of recovery is slightly different from that of the previous standard.

There is also requirement for additional disclosure of whether the waste is diverted on-site of off-site, to show the extent to which the organisation knows how its waste is managed.

 

3. Transportation of hazardous waste is no longer a standalone metric

In the revised Standards, transportation is to be disclosed under “waste management by third parties” (GRI306-2).

 

Circularity tools

For companies interested in waste reduction and circularity, here are some tools that may be helpful:

 

Circulytics by Ellen MacArthur Foundation

https://www.ellenmacarthurfoundation.org/resources/apply/circulytics-measuring-circularity

This company-level measuring tool reveals the extent to which a company has achieved circularity across its entire operations. It does this by using the widest set of indicators currently available: enablers and outcomes.

 

Circular Transition Indicators (CTI) by World Business Council for Sustainable Development

https://www.wbcsd.org/Programs/Circular-Economy/Factor-10/Metrics-Measurement/Circular-transition-indicators

A framework to measure circularity, the Circular Transition Indicators (CTI) is a simple, objective and quantitative framework that can be applied to businesses of all industries, sizes, value chain positions and geographies.

 

Paia Consulting can support you in your waste reporting and management strategy.

 

We have extensive experience working with NEA and Singapore companies on their sustainability, waste and recycling. Our waste services include data measurement and reporting, conducting waste audits, and creating waste reduction plans. If you are interested in further discussion of this topic, contact us at info@paiaconsulting.com.

References:

https://www.eco-business.com/opinion/in-the-pacific-covid-19-is-changing-the-way-we-think-about-waste-management/

https://www.todayonline.com/singapore/singapore-households-generated-additional-1334-tonnes-plastic-waste-during-circuit-breaker

bright-solar-pv-prospect-for-singapore

A Bright Solar PV Prospect for Singapore

By Adrian Pang

The Sustainable Energy Association of Singapore (SEAS) hosted a recent webinar on the solar photovoltaic (PV) roadmap of Singapore. Dr. Thomas Reindle, CEO of the Solar Energy Research Institute of Singapore (SERIS) at the National University of Singapore (NUS) presented a holistic summary of SERIS’s report that charts Singapore’s roadmap based on reviews and updates of its 2014 roadmap. The roadmap highlights Singapore’s great potential in expanding its solar PV infrastructure and services. Some of the key areas of development are:

    • Existing topics: space availability, space utilisation, increasing energy yield, levelised cost of electricity from solar PV (LCOE), possible scenarios for PV deployment, managing PV grid integration,
    • New topics: end-of-life PV recycling, repowering, Renewable Energy Certificates (RECs), and importing of solar energy.
  1. Space availability: Solar PV deployment is part of sustainable urban planning and it embodies the clean and green ‘Garden City’ vision that Singapore values. Solar PVs benefit the environment and have public acceptance as it is perceived to be safe. Space availability for different types of PV deployment is assessed based on these values and their respective potentials. Despite being a small island nation, Singapore can deploy five types of solar PV:
    • Rooftop (most common in Singapore)
    • Facades (for building-added and building-integrated PV, BAPV/BIPV[1]
    • Mobile-/land-based PV (temporary land use)
    • Floating PV (reservoirs, near-shore), and
    • Infrastructure PV (e.g. over-arching land, canals, roads, or PV noise barriers).
  1. Space Utilisation: Solar PV deployment in land-scarce Singapore also entails the highest utilisation and efficiency of technologies employed. While ultra-high efficient modules have similar levelised cost of electricity (LCOE) as most standard modules, they have higher area efficiency, hence higher space utilisation. Put simply, more electricity generation in a given surface area. At present, ultra-high-efficiency technologies have higher market prices due to limited availability but higher production and demand will drive process and cost down for the benefit of Singapore’s solar landscape in the future. Aside from technologies, increasing area factor of PV systems and implementing novel PV applications (e.g. co-location of rooftop PV with greenery, improving BIPV areas, expanding floating PV, etc.) can maximise space utilisation of PV systems in Singapore too.
  1. Increasing energy yield: Solar technologies are also important to maximise PV system’s energy yield from its installed capacity. A well-designed system in Singapore has an initial “Performance Ratio” (PR) value of above 80% with a typical degradation rates of 0.8% per annum. The degradation is caused largely by Singapore’s high temperature climate conditions. Therefore, a PV system with good ventilation or technologies to regulate temperature (e.g. Floating PV) is beneficial in increasing energy yield. The “Floating PV testbed” at Tengeh Reservoir is found to have 5% to 15% higher energy yield. Next, the highly distributed nature of small individual systems in Singapore requires smart operation and maintenance, and fleet management to maintain effective energy yield and performance consistently. Approaches such as predictive and preventive maintenance based on big data, Artificial Intelligence, comprehensive diagnostics of issues, etc. are important to maintain a lean but efficient operation and maintenance of Singapore’s sprawling solar PV systems.
  1. Planning, management and development: Apart from physical infrastructure development, good strategic planning and actions are required to upscale solar PV systems in Singapore.
    • Minimising the levelised cost of electricity from solar PV (LCOE): LCOE is a well-established method in energy finance and policy that calculates the generation cost at the point of connection to a load or power grid. In an energy market, sources that have lower LCOE are preferred and prioritised. Therefore, solar energy should strive to achieve lower LCOE through the continuous research and development.
    • Possible scenarios for PV deployment: a scenario-based approach charts the potential development trajectories of solar PV deployments. In Singapore, there are two scenarios that are associated with different levels of adoption and technological advancements – “Baseline” (BAS) and “Accelerated” (ACC).
    • Managing PV grid integration: As renewable energies are highly varied in nature, solar PV faces challenges from other renewable sources to be the preferred renewable energy source in Singapore. An all-encompassing and comprehensive approach that includes assessing global development trends in the renewables sphere, PV grid integration measures (supply and demand side management, energy storage system (ESS), grid upgradation, and new equipment), and grid impact assessment of PV (demand profile and ramp rate impact, distribution network impact, inertia and reserve requirements, and protection system) are required to solidify solar PV’s status as Singapore’s preferred renewable energy source.

Aside from the existing topics that require constant improvements, the updated project also identified new topics that are crucial for the development of solar PV deployment in Singapore.

  1. Re-powering: As PV systems age, power generation equipments require replacement with the latest technologies that have higher efficiencies, better performance and greater reliability. This is evident in the more mature wind industry where maximum power generation per tower and size of windmills have increased substantially. As the development of wind power project sites are usually time consuming, it is often more economical to upgrade existing systems.
  1. Recycling: As the solar industry grows exponentially, ageing PV modules are an upcoming waste issue that requires responsible management. A study by the International Renewable Energy Agency (IRENA) showed that PV waste was around 250 tonnes in 2016 and is expected to grow to 1.7-8 million tonnes by 2030. Ageing modules constitute hazardous waste if not managed properly. Therefore, recycling is crucial in the PV value chain. There is currently no PV recycling company in Singapore, as well as a lack of efficient and cost-effective PV management process locally due to the low volume of PV waste and a relatively young market. However, Singapore is projected to increase its solar capacity from the current 350 MWp to 2GWp by 2030. Coupled with the “re-powering” of old assets that accelerate the decommissioning of certain existing installations, “end-of-life” PV and system components require the formation of policy-based regulations and technological improvements to ensure safe and sustainable recycling.
  1. Renewable Energy Certificates (RECs): RECs are tradeable, non-tangible market instruments that represent proof that electricity was generated from a renewable energy (RE) source. There are two categories of RECs:
    • Bundled RECs: instruments whereby the “green attribute” is coupled with the electricity that is generated. Bundle RECs are generated and retired in tandem with the actual supply and consumption of electricity, thereby bound by certain considerations such as geographic constraints.
    • Unbundled RECs: instruments whereby the “green attribute” is decoupled from the electricity that is generated. Unbundled RECs do not provide physical delivery of electricity from a renewable source but rather its green attribute. Unbundled RECs allow for more flexibility as business can purchase them at different volumes and at any time based on internal business and sustainability goals and decisions.
  1. Importing of Solar Energy: Singapore can boost its share of renewable energy by importing from other countries in the forms of electricity or other energy carriers such as hydrogen (often referred as “solar fuels”). However, the premise of importing renewable energies also includes other renewable sources such as wind power, bioenergy, hydropower or geothermal. At present, these are the notable projects and developments:
    • Trans-border cable connections
      • PV system deployment in neighbouring countries (e.g. setting up Solar Farms in Malaysia and transporting energy generated across the Johor Strait)
      • Pan-Asian power grid interconnection (transnational super grids that foster large scale utilisation of renewable energy sources beyond regional co-operation)
    • Imports over greater distances
      • Off-shore floating solar farms (e.g. Singapore building off-shore solar farms in international waters of the South China Sea, supplying solar electricity via subsea cables to Singapore)
      • Long-distance cable connections
    • Importing solar fuels (e.g. Australia’s national hydrogen strategy focuses on developing and expanding its hydrogen export markets)

The webinar on the updated solar photovoltaic (PV) roadmap of Singapore concluded with the following priorities to increase solar power use in Singapore. First, there is a need for high to ultra-high efficiency solar technologies. Secondly, employing novel “urban solar” applications (cost-effective solutions with good deployment and no substantial substitutes type of potential developments). As for topics with increasing relevance for the solar PV sphere in Singapore, discussions around recycling and circular economy, urban heat island effect of PV in cities and bankability of PV in Singapore are gathering pace. Overall, Singapore possesses a high potential to make significant transitional steps to become a solar powered country.

[1] https://bipv.sg/about-seris/