All of us yearn for recognition and acknowledgement to some extent, whether in work or life.
Growing up, we strived to be our parents’ good child, then teachers’ favourite student, spouse’s good partner, company’s good employee, the list goes on and on.
The desire to succeed and excel in our endeavours is simply too strong as if not getting validation will make us a loser. This is how the craze started, with certificates covering everything from sports to blood donation, dance and more.
The same goes for sustainability practices. When we are doing something good, it is natural to seek sincere appreciation that encourages us to continue those behaviours.
This gives rise to a list of green certifications for different industries and topics. One example is the energy efficiency label you can easily spot on some household appliances.
The energy efficiency label is issued by the Energy Commission (ST), with a star rating system of five stars being the most efficient, and one star being the least efficient.
I own a few of these smart appliances, a four-star certified refrigerator, television, washing machine and fan. I never calculated the actual energy consumption but noticed a significant reduction in electricity bills after using them.
As a consumer, it feels good to be able to save money while helping the environment.
Green tax incentive for businesses
However, attaining green certifications is not just about winning over customers or displaying paper certificates by framing and hanging them on the wall. It goes beyond that!
Not many are aware that the government has introduced various green tax incentives to empower businesses to become more eco-friendly.
For instance, the Green Building Index (GBI) certificate can be used to claim tax exemption equivalent to 100 percent of the additional capital expenditure incurred to obtain the certificate.
Buyers of buildings and residential properties awarded the GBI certificates are also eligible for stamp duty exemption on transfer of ownership of such buildings.
On the other hand, the Green Income Tax Exemption (GITE) incentive is applicable to businesses that are green technology service providers and investors of solar photovoltaic systems (Solar PV).
To explain further, a green technology service provider offers a scope of services encompassing system design, feasibility study or consultancy in multiple sectors such as renewable energy, electric vehicles, green township etc.
A Solar PV investor possesses a minimum installed capacity of 3MW solar PV projects aggregated under the Net Energy Metering (NEM) for a period of five or 10 years depending on the installed capacity.
Green credentials and banks
Banks make money by lending money out. However, they will want to determine if the borrower is able to repay the amount borrowed within the agreed timeframe.
Besides assessing the borrower’s creditworthiness, banks also tend to prioritise businesses with green credentials.
Banks favour investments in sustainable or socially responsible businesses as they are seen to be more resilient to climate risks to avoid unexpected disruptions in supply chains that can lead to losses.
In other words, sustainable businesses can remain profitable and outperform their competitors in the long run.
Green credentials bust greenwashing fears
Another point that should be stressed is that green credentials help bust greenwashing fears.
Certified businesses are responsible for adhering to the sustainability criteria outlined in the certification system. Over time, businesses build a reputation that becomes a standard quality image associated with the brand name.
In this context, the Forest Stewardship Council (FSC) certification identifies that wood and paper products are proven to be sourced from sustainably managed forests.
Additionally, the SIRIM Eco-Labelling, Organic Content Standard (OCS), Fairtrade Certified Agriculture Production Standard (APS) and Global Good Agricultural Practices (GAP) are some of the most recognised green certifications, used to evaluate the environmental impacts of products and services.
Most importantly, going green is a cost-saving action. Businesses that implement energy-efficient technologies and optimise supply chain processes often find that the upfront investments are outweighed by the long-term financial benefits.
At the end of the day, net zero is not just a regulatory compliance or political commitment, it is a business imperative! Hence, it is important to showcase your decarbonisation efforts through green credentials! - Mkini
CHONG YEN MEE is a climate change analyst by training and enjoys writing doomsday stories that make people act.
The views expressed here are those of the author/contributor and do not necessarily represent the views of MMKtT.
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