Developing green sector capabilities and global leadership skills

In this video episode of Singapore Budget 2026 Insights by KPMG in Singapore, Mark Addy, Partner, Energy & Natural Resources, Telecommunications, Media & Technology, Tax and Cherine Fok, Partner, ESG Consulting discuss how Budget 2026 can advance Singapore’s sustainability transition, accelerate the development of ESG skills across the workforce, and nurture globally relevant leaders.  

Read video transcript below.

Cherine Fok: 
Hey Mark, how have you been?

Mark Addy: 
Very well, thanks Cherine. And I'm very excited to be here to discuss the Singapore Budget 2026 and what we would like to see Singapore introduce to enhance or advance the sustainability transition.

Cherine Fok: 
Likewise, the transition is really important, and I think the Budget is a very strong signal for us as a nation on what we should focus on, for our sustainability efforts to be put to good use, and to allow us to be more relevant and competitive globally.

Mark Addy:
That’s right. I think strategic transformation will be especially important for Singapore to distinguish itself as a leader in sustainability. But before we talk about that, we have to acknowledge that Singapore has already made a lot of progress.

As a carbon services hub, Singapore has made significant headway. There are now multiple agreements on carbon trading with other countries. There is also an increased amount of investment in emerging energy options and low carbon technologies. One example of that is Jurong Island, where we are seeing resources being set aside for the development of new energy solutions.

Cherine Fok: 
That's right. I was really excited to read about the green data centre launch in Jurong Island. It’s encouraging to see that Singapore is making more concerted efforts to move towards a more sustainable future.

In addition to all of these initiatives and investments, the biggest investment we need to make is the investment in our people, and to allow our workforce to transform into one that remains competitive in the green economy.

Mark Addy: 
I couldn't agree more on the workforce aspects. What we've done, Cherine, is to come up with various recommendations for the Budget 2026 as to what we at KPMG would like to see introduced to enhance the sustainability transition in Singapore.

We've got three core strategies that we are proposing. The first is to empower boards to accelerate the sustainability transition through ESG accreditation. The second is to introduce targeted subsidies for green-focused skills, coupled with leadership development programmes for executive-level individuals. Thirdly, we would like to see more incentives for enterprises to meet their sustainability goals and reward decarbonisation initiatives.

Cherine Fok: 
Indeed, it's the right place to start looking at the top of the organisation, at the top of the house, because that sets the leadership tone across the organisation. Boards are already vested with the responsibility of steering companies in the right strategic direction.

Going green or implementing sustainability practices is a very strategic direction for them, and companies need to identify their risks and opportunities early. Having the board certified and trained definitely allows the board to carry out its duties much better and also allows that level of transparency and confidence in others around their commitments.

Mark Addy: 
I think, Cherine, that these initiatives will especially benefit local enterprises, especially SMEs (small and medium-sized enterprises). They would have better access to qualified board resources and then be able to plug that skills gap that we currently see at the leadership level.

By having top leaders with certified ESG competencies, Singapore companies will be more attractive to foreign investment. There's a double benefit to that. But besides enhancing a board's ESG competencies, I think we also have to look at business leaders and the wider workforce and have specific initiatives targeted at them to give more training to ease that sustainability transition across the organisation.

Cherine Fok: 
Definitely. I think the board training needs to be augmented by training at the wider workforce within the company. I would be right to say that there is a certain level of anxiety among the workforce. ‘What am I going to do to continue being relevant, continue increasing and enhancing my professional value and the value that I bring to the firm?’ So, having this targeted training for the whole workforce to move together as one would be important.

Mark Addy: 
When we think about the transition, we have to acknowledge that business leaders have a lot on their shoulders already. They're not just dealing with sustainability, they're dealing with a whole range of regulation, they're dealing with a whole range of business change, economic challenges. So, this is just one subset of their role. We need to find ways to support that.

And one thing that we had thought may be an interesting aspect to implement would be a kind of peer-to-peer sharing platform tailored more towards C-suite leaders, to foster strategic dialogue, exchange best practices, boost that kind of collective learning – not giving away your competitive advantage and your IP, but more to share the challenges that different companies are facing. 

It might relate to green finance, it might relate to carbon management, it might relate to circular economy principles. But it would give C-levels an opportunity to share those ideas in a forum with their peers so they can then go back to their organisations and say, ‘OK, this might work for us’, we’ll start to implement something like that, without having to do it all themselves, as is kind of currently the case.

Cherine Fok: 
I agree with that. Having a vibrant ecosystem is where we are getting to because we are in a very emerging area. There are many unknowns. Having that community of practice definitely helps everyone to journey together and also uplifts the entire sophistication and maturity of our leadership teams.

Mark Addy: 
Another strategy to incentivise companies is to look at sustainability targets for carbon reduction and resource efficiency. As you know, Cherine, I am a tax partner, so I always think about how can we use tax as a kind of lever to incentivise outcomes?

We have the carbon tax, which is kind of the penalty for excessive carbon emissions. But where I think we could see more is on the incentive side, the carrot side. How do we use tax incentives to incentivise companies to take actions that we want them to take, in relation to sustainability?

For example, we could see tax credits for firms that complete external ESG assurance, or firms that are voluntarily reporting on their Scope 3 emissions externally are given tax credits or tax incentives to do that, because these are things that are not mandatory, but are things that we want to encourage companies to start doing before they become mandatory.

We could also see things like enhanced tax deductions if companies are investing in comprehensive ESG training to cover all of their workforce. There is a significant cost associated with doing that. An enhanced tax deduction or a tax credit is one way of alleviating some of the cost. 

Cherine Fok: 
I suppose what we are looking at, Mark, would be a tax incentive framework that is really incentivising and rewarding more innovative companies who are looking to reinvent themselves or maybe to remain ahead of the curve compared to their competitors when they are thinking about decarbonisation, green products or even their workforce.

Mark Addy: 
It's a gentle nudge in the right direction.

Cherine Fok: 
Great insights, Mark. Singapore would benefit from a more targeted effort to reward decarbonisation. For a first step, we have already moved to raise carbon taxes, with further increases planned for the years ahead. To drive meaningful climate action, Singapore's carbon tax system must also evolve.

Mark Addy: 
I agree with that. And I guess post-2030, when that rate is going towards $80 per tonne, one thing that could be considered is making it a more progressive carbon tax system.

So, not having a blanket rate that applies to all of your emissions, but having a progressive rate that applies to, say, emissions below a certain threshold is taxed at $10 per tonne. And as we then progress towards the much higher emissions, then we get towards the $80 per tonne rate. 

So it's a fairer tax for the lower emitters. And then we have the very high emitters paying the highest rate of carbon tax. But we could also look at that from the perspective of facility emissions volume, as we currently do, or we could look at emissions per unit of output. So if you've got various products being produced from a certain facility, then we look at the emissions per product rather than the total emissions per that facility. It then comes back to how efficient are you per product? And this might get us better outcomes when it comes to decarbonisation initiatives.

Cherine Fok: 
Indeed. I think with data and data analytics, we could have a lot more information around what are the options we have and the different ways of crafting this system to make it really relevant for Singapore.

In addition to what you have shared, there could also be permanent or conditional tax rebates for energy-intensive or perhaps certain trade-exposed sectors, especially those that are exporting to countries such as the EU, where they also have carbon tax systems.

This could be based on set criteria, such as a verified year-on-year reductions in carbon intensity, investments in low-carbon technology, and implementation of phased decarbonisation roadmaps. 

These steps will help Singapore establish transparent, performance-based pathways, especially for the large emitters.

Mark Addy: 
I think you made a really important point there, Cherine, about competitiveness and trade-exposed industries, because we have to find this balance between carbon taxes that are sufficient to incentivise decarbonisation investment, but also making sure that in the short to medium term, Singapore is able to maintain its competitiveness on a regional and global scale. So it’s a really important balance to strike.

But the transition is obviously truly important for both Singapore's future and the future of the rest of the world as well. And we hope that with these suggestions, there will be more support for businesses to develop green sector capabilities, and also to nurture leaders in Singapore with globally relevant ESG and sustainability skills.

Cherine Fok: 
This is very insightful, Mark. Thank you very much for the chat.

Mark Addy: 
Yes, thank you, Cherine.