Speaker 1: Welcome back to GKTV. I had to be away for two months on some R&R, but I'm back again. It's nice to see you. Today's topic is why should companies incorporate sustainability into their businesses? What does any creature need for a good quality of life? All living things need clean air, fertile lands, unpolluted rivers, and uncontaminated seas. All these are unquestionably essential for the continued survival of the earth. Although this is plain, do businesses care? Think about three important questions. First, what are the advantages of implementing sustainability policies? Second, is it worth it? What if businesses refuse this new norm? You know what sustainability means to a business, don't you? Sustainability in a business describes the ability of businesses to co-exist with and even enhance their environment. These days, big businesses are increasingly being pressured to incorporate green and socially responsible practices into their corporate strategy. Is profit the only aim of business? In November 2021, during the Singapore Fintech Festival presentations on sustainability, the business community's initial and typical reaction was, this is topical and important, but is it really relevant to our business? Participants viewed sustainability goals as something not relevant to profit. To some businesses, sustainability only makes sense if their businesses can make greater profit. So some business owners deliberately closed an eye to sustainability. That a business is not there only to generate profit is a universal truth. Yet, are businesses prepared to accept this? If whalers continue to kill whales with no thought to their extinction, if timber companies cut down trees with no thought to vegetation and animals, in what kind of world would our grandchildren live? Who would, in the name of profit, deliberately create a desert for their descendants? Doesn't make sense, does it? So, is it selfish and self-destructive to use profit as a measure of business success? Let's think about it. Could sustainability deliverables be measured? 20 years ago, no one could draw a straight line between how the behaviour, irresponsible behaviour of a business would affect global temperature rises, or how that prejudiced or enhanced the virtue of a business's assets. All that has changed. Increasingly, independent international bodies measure and give or remove credit or points from companies that practice sustainability goals. No one will invest in a company that secretly abandons drums of poisonous waste material in caves. No one would dare to be part of a board that kills whales or cut down rainforests. The important point is, true sustainability practices are an intangible asset. Institutional investors like to associate themselves with responsible companies. If a company's sustainability implementation improves, economically, it stands a better chance of survival and success. Now, let's look at the advantages of these processes. Let us see how sustainability is crucial for the survival of any business. Number one, it creates new markets. Any corporate move towards sustainable responsibility brings into play new factors. Businesses become more innovative. They offer new products. They provide novel services. Take Tesla as an example. Its electric-powered vehicles cut carbon monoxide emissions. To a great extent, BMW has also seen the writing on the wall. All that opens new revenue opportunities. In the financial services sector, new products have emerged. For example, green bonds, environmental risk solutions, for example, insurance-linked securities, and carbon credit trading platforms. Take Sensfolio, which is a data provider. Sensfolio rates companies on their commitment to environmental, social, and corporate governance values. They use artificial intelligence to rate a business's sustainability commitment. The ratings cover wide areas of businesses, ranging from clothing to groceries. Number two, sustainability offers a unique selling platform. In a few years, sustainability will become the norm. Right now, however, investors see companies that support sustainability as unique businesses, and these businesses are more attractive. There's one factor. This uniqueness keeps them leaps and bounds ahead of their competitors. EasyJet is an alliance company. Recently, EasyJet announced that it will operate net-zero carbon flights worldwide by planting, you guessed it, more trees. It promises to cut down carbon dioxide release. Now, this will cost the airline $25 million in the next financial year, but guess what? Its sustainability policy will boost its brand image. The US $25 million spent is a catalyst. Number three, regulators like it. All over the world, regulators are increasingly imposing specific sustainability requirements. For example, the European Union will soon make new laws. These laws would require financial markets to disclose which of their investments do not comply with a set of harmonized sustainability criteria. Other authorities around the world are following suit. Hong Kong is an Asian example and a good one too. Australia is hot on its heels. Number four, you become less of a target. A business that practices sustainability initiatives indicates a responsible management, a healthy corporate culture, and environmentally conscious operations. When regulators carry out risk assessments, businesses with a strong sense of respect for the earth make them less of a target. Number five, sustainability creates customer loyalty. Shelton Group, Nielsen, and Horizon Media are consultancies. A recent survey they conducted suggests that most consumers are more likely to buy from businesses that practice sustainability policies. Consumers will spend more money on sustainably manufactured products. For the modern consumer, sustainability is a personal concern. They worry the world as it is now is a safe place to live. They worry about the well-being of future generations, their children and grandchildren. Number six, the pursuit of sustainability is now a strong consumer lifestyle. So a company that pursues sustainability goals will make consumers happier. It gets brand loyalty. Number seven, sustainability has another intrinsic value. It generates a new world of business and trading. Hardwiring sustainability into a business is a concrete expression that you care about the earth. Savvy enterprises have now realized that investing in sustainability is not just an act of philanthropy. It generates a whole new world business opportunity. Imagine if every business makes it its responsibility to respect the earth. Before sustainability becomes the new normal, every early movers will benefit the most. Is your business one of them or will you be left behind in the wake of a new one? Think on it. Goodbye.