In a report released by RHB Bank Singapore on Sept 30, analysts Shekhar Jaiswal, Vijay Natarajan and Alfie Yeo believe that food and beverage (F&B), real estate and REITs and transportation sectors stand to gain from the Singapore Green Plan (SGP) 2030.
SGP 2030 is a long-term sustainability policy that sets out various goals across sectors to transform Singapore into a more sustainable, resource-efficient and climate-resilient nation. This includes concrete sectoral plans and targets to ensure that Singapore can reach its net-zero emission goals while strengthening climate, resource and economic resilience, the analysts add.
“As a small, low-lying city-state that relies heavily on imported food and energy for survival, and also depends on the connectivity of global product supply chains for growth, Singapore is extremely vulnerable to global climate change,” the analysts say.
According to the analysts, the path to achieving these targets has not been linear, particularly with Covid-19 affecting progress. With just six years away, the analysts believe that both governments and companies will need to accelerate efforts to meet their targets.
In consumer (F&B), the analysts identify local urban farms as immediate beneficiaries while listed F&B players would be limited beneficiaries as most are practising more sustainable resource management. The analysts point to Sheng Shiong and DFI Retail Group D01 (DFI) as beneficiaries.
SGP 2030 focuses on strengthening food security for sustainable living. The analysts note that agriculture and food production within Singapore remain small, with most of its food supply being imported. As such, SGP 2030 incentivises an increase in local food production, diversification of import sources and cultivation of food overseas.
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The analysts note that while Sheng Siong faces a vulnerable supply chain due to geopolitical instability, it has implemented processes such as supplier diversification and develops and maintains strong relationships with its partners. Furthermore, SSG regularly conducts market research to ensure its products are affordable and well-priced and practises diversification in sourcing to promote sustainable food supply at stable prices, the analysts add.
DFI has a net-zero emission target by 2050 and aims to achieve decarbonisation. According to the report, DFI aims to accelerate decarbonisation in the short term by “retrofitting its stores with Water Loop technology fridges, educating team members, installing lead detectors to address fridge leakages, using low Global Warming Potential (GWP) refrigerant gas, electrifying delivery vehicles, and increasing the waste diversion rate.” In the medium term, DFI aims to extend decarbonisation across its value chain by 2030 by fully electrifying its fleet, sourcing low-carbon products and increasing its recyclable packaging.
In the analysts’ view, the real estate and REITs sector is a key pillar in Singapore’s green transition, with a multitude of incentives and government initiatives driving change. The analysts have identified CapitaLand Ascendas REIT A17U (CLAR), Capitaland Integrated Commercial Trust (CICT), Keppel REIT (KREIT) and City Developments (CDL) as beneficiaries.
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According to the report, buildings and household sectors account for more than 20% of carbon emissions in Singapore, as such green buildings are crucial in Singapore's climate change strategy. The analysts note that the Singapore Green Building Master Plan, introduced in 2021, is a key step in mitigating real estate environmental impact.
The analysts recognise CDL in environmental sustainability and as Singapore’s first real estate developer to sign a global pledge to achieve net zero operational carbon by 2030. CDL’s efforts are reaping tangible positive benefits as seen by its inclusion in various sustainability-related indices and cost savings, the analysts add.
CLAR, CICT and KREIT have taken steps to achieving environmental sustainability by ensuring their properties are green certified or green rated, showing their commitment to achieving their sustainability goals.
In the transportation sector, the analysts are of the opinion that land transport operators, airlines, aviation service providers and port and shipping companies will be key beneficiaries of the climate change movement. The analysts have identified Singapore Technologies Engineering S63 (ST Engineering) and ComfortDelGro C52 (CDG) as beneficiaries.
Transportation is Singapore’s third largest carbon dioxide emitter. As such, SGP 2030 aims to cut 80% of peak land transport emissions by 2050 by promoting public transport, green public transport fleets and private vehicles, and encouraging active mobility modes.
The analysts note that there has been good progress under the Land Transport Master Plan 2040, while the Sustainable Air Hub Blueprint and Maritime Singapore Decarbonisation Blueprint outline decarbonisation action plans for the aviation and maritime industries.
The analysts state that ST Engineering has started its task force on Climate-related financial disclosures, and established a roadmap for expanding carbon emission data collections and disclosures. Additionally, ST Engineering is the exclusive importer and distributor of MAN bus, a single-deck electric bus in Singapore.
Meanwhile, CDG has set clear decarbonisation targets, with plans to transition their fleet to cleaner energy vehicles, optimising operations to reduce resource consumption and working with partners to expand sustainable mobility solutions, the analysts say. Furthermore, CDG also invests in solar electricity and other sustainability efforts to further their efforts.
