When committing to something as costly and permanent as the built environment, ignoring sustainability factors is “penny-wise and pound-foolish”, says Wong Heang Fine, CEO of Surbana Jurong Group. “Everybody thinks sustainability is costly, but the fact is: If you don’t spend now, you’ll pay for it later.”
Wong points to the recent floods in Australia. “Both at the government and individual level, the cost can be tremendous, along with the disruption and threat to life,” he tells The Edge Singapore.
“Climate — how do you post a cost on that?” Wong asks. Faced with the threat of climate change, the goal is to minimise the impact on the environment when constructing buildings and cities that consume less in the long run.
“If we are able to each contribute a little bit towards the costs of ensuring the future is not hit by major events, then it is worth it,” he adds.
Surbana Jurong (in its current and previous forms) has built over a million homes in Singapore and created master plans in more than 30 countries.
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“Master planning is our key expertise,” says Wong. “So, in influencing these new developments, we have a great responsibility to make sure that we introduce all the sustainable features we can think of, so that 10, 15, 20 years down the road, there will be a new form of cities in the world.”
With 16,500 staff across Surbana Jurong and member companies Aetos, Atelier Ten and SMEC, to name a few; Surbana Jurong today covers the “entire spectrum of consultancy”, says Wong. “We are probably the only local consultant with that diversity in capabilities.”
Building with sustainability in mind is much easier than retrofitting features down the line. Surbana Jurong Group is eyeing Vietnam, Indonesia and the Philippines, and has hired lead roles in these markets, where Wong sees “tremendous urbanisation growth” in the coming decade.
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If we don’t help our clients think about sustainability, and they want to implement some of those features later on, it will be very difficult.
According to Wong, as the ranks of the middle-class increase, there will be greater demand for infrastructure, transport, water consumption and so on. “This urbanisation growth will need to take into account its impact on the environment and the climate,” he says.
In Singapore, there is an even greater urgency to transform. “It’s easier for new communities to adopt sustainable approaches compared to established cities,” says Wong.
In any scenario, it is always easier to start from scratch, but much harder to undo the past. “If we don’t help our clients think about sustainability, and they want to implement some of those features later on, it will be very difficult.”
Key targets
This time last year, Surbana Jurong issued a 10-year $250 million sustainability-linked bond (SLB). It marked the first Singapore dollar-denominated SLB and the first public SLB issuance from a Southeast Asia-based company.
“Our objective when we first looked at the SLB was to demonstrate that sustainability is not just about incurring more costs,” says Wong.
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“There are also ways of leveraging sustainability to reduce the costs of operations. In this case, we have plainly demonstrated the desire of financiers to finance sustainability instruments.”
The bond, carrying a coupon rate of just 2.48%, was very quickly snapped up by investors. By the time book building was halted, more than $1.7 billion in orders were received, making the issue more than six times oversubscribed.
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Proper monitoring and charting of progress are crucial to a successful SLB. In Singapore, Surbana Jurong monitors more than 26,000 lifts across 10,000 housing units. Wong believes their track record offers a tremendous advantage. “This is where our managed services come into play; they will be able to help bond issuers set up systems to monitor and to churn out progress reports, which are independent of the borrower.”
Surbana Jurong’s SLB was structured with two KPIs: a 10% reduction in greenhouse gas emissions in three of its core businesses by the end of 2029 (Surbana Jurong in Singapore, Aetos and SMEC Australia and New Zealand), and net-zero carbon emissions at Surbana Jurong Campus by August 2030.
Should the group not meet the KPIs, Surbana Jurong will pay a premium of 0.75% at the bond’s maturity in 2031.
If you don’t have sustainability built into your product and your services, then your market is not going to give you the recognition.
Across the group, Surbana Jurong has a total of 500 professionals engaged in renewable energy, clean energy and carbon capture, utilisation and storage (CCUS).
Wong says the group intends to triple this headcount over the next five years. “As more of our clients become aware of the importance of sustainability, and as we push the boundaries of technology, we will require more expertise across the globe.”
Surbana Jurong is working with key clients Pan-United Corp and Union Gas Holdings to take bolder steps in transitioning to renewables.
In January, Pan-United Concrete entered a partnership with Surbana Jurong to evaluate converting Pan-United’s fleet of more than 1,000 trucks to electric and hydrogen-powered vehicles.
Like most works, the new Surbana Jurong Campus in Jurong has been hindered by Covid-19. “Completion is delayed, but we hope to be able to move in this year. Thereafter, we should be able to improve on those targets that we have set in our SLB,” says Wong.
Leaders and businesses must be aware that the market is changing, says Wong. “If you don’t have sustainability built into your product and your services, then your market is not going to give you the recognition."
Photos: Albert Chua / The Edge Singapore
