A key announcement of Budget 2017 by Finance Minister Heng Swee Keat was that water prices will increase by 30 per cent in two phases: this July and July next year - the first increase since 2000.
The reasons for the increase are to fund the higher costs of developing, operating and maintaining Singapore's water infrastructure, which, according to national water agency PUB, have more than doubled in 15 years, to $1.3 billion by 2015. The country's four national taps are water from local catchments, imported water, Newater and desalinated water.
Singapore uses 1.9 billion litres of water a day, with the domestic sector using 45 per cent and the non-domestic sector, the remainder. It is projected that by 2060, water consumption will more than double.
For the non-domestic sector, the total price increase will be from $2.15 per cubic m to $2.39 this July, and to $2.74 from July next year.
The increase highlights water as an economic asset and reinforces the common understanding that it is precious and that, everyone, including businesses, need to play a part in water conservation.
Furthermore, water conservation is vital to Singapore because more than half of the water consumed is from local catchments and imported water, which are affected by climate change.
In a Singapore Budget forum on Feb 23, Senior Minister of State for Finance and Law Indranee Rajah said the price rise will hopefully drive businesses to look for cost-effective ways to conduct their operations.
Meanwhile, Minister for National Development and Second Minister for Finance Lawrence Wong has said water is a matter of survival for Singapore, and the Government deliberated carefully before deciding on the price increase.
NEW COMPANY GUIDELINES
Apart from consumers, companies, too, have a role to play in water conservation.
The Singapore Exchange is introducing new guidelines requiring the issue of a sustainability report on a "comply or explain" basis, starting from next year. Currently, it is on a voluntary basis.
Listed companies will have to publish such a report at least once a year, no later than five months after the end of each financial year, covering five primary components - material ESG (Environmental, Social and Governance) factors; policies, practices and performance; targets; sustainability reporting framework; and their board statement. For the first year, firms will have up to 12 months from the end of the financial year to publish their report.
I propose that companies reporting according to these new guidelines should disclose sustainability information on their water conservation activities.
The objective of corporate water reporting is to ensure that companies have measuring, monitoring and reporting systems for water usage. The information will be useful to improve stakeholders' understanding of how water is managed for the benefit of the country and the environment.
Based on the Global Reporting Initiative's Sustainability Reporting Guidelines, some key performance indicators that companies can report on include percentage and total volume of water recycled and reused, and total water discharged. More technical indicators can also be used.
By measuring key performance indicators over time, stakeholders will be able to observe trends in water management.
Besides key performance indicators, companies can report on their water conservation initiatives - for example, the cost of water, the expenditure on water conservation activities to mitigate the effects of business operations on the environment, and the amount spent to reduce the environmental impact. In addition, companies can disclose whether they use technology to optimise water usage, and whether they use products that are under the PUB/Singapore Environment Council's Water Efficiency Labelling Scheme.
The Association of Banks in Singapore could also request that its member banks incorporate water conservation as one of the environmental, social and governance criteria in their lending process and risk assessment. The water management information provided in corporate sustainability reports will be useful to banks in making loan decisions.
It will be helpful to also have short-, medium- and long-term national goals for managing water supplies, so that companies can benchmark their water performance targets against these goals.
The writer is a senior lecturer at SIM Global Education.
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This article was first published on March 3, 2017.
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