Navigating the green financing landscape: Key insights for businesses

In a world grappling with environmental crises, businesses and companies are facing increasing pressure to do their part to improve their environmental footprint. This is especially so for businesses in food systems or agriculture, which contribute to between 25% and 30% of global greenhouse gas emissions. While green financing solutions, such as carbon offsets, are supporting businesses in pursuing more sustainable models, what else can be pursued to make a difference?

Spurwing recently attended a conference on “Demystifying Transition Financing & Carbon Credits” hosted by WOMAG. Here are our key takeaways from the conference.

First, understand the wider context

It is crucial for businesses to understand how government-led climate goals impact their industries. For example, Singapore will be raising its carbon tax from SGD$5 per tonne to SGD$25 per tonne in 2024. This will trickle down to consumers, and businesses need to be prepared to manage the change. Businesses will also need to have a holistic understanding of the needs of stakeholders across their entire supply chains. This includes considering workers on the ground, such as how smallholder farmers will receive socioeconomic support to remain professional while reducing emissions.

What is transition financing?

Transition financing involves providing financial support to businesses and industries from high-carbon environments in implementing long-term, strategic initiatives to reduce greenhouse gas emissions and their potential impact on the environment. This type of financing is crucial in helping industries shift away from environmentally harmful practices, which risks them being left behind. It can lead to cost savings, enhanced stakeholder relations, and presents opportunities for investors, institutions and businesses to actively contribute to a more sustainable future.

When should companies start green financing?

There is no set timeframe for companies to begin their journey with green financing. In fact, businesses should start the process early and actively engage with the market to position themselves. Businesses will need to consider their overall transition plan, target-setting methodologies, and ensure transparent documentation of claims to avoid greenwashing. Sustainability should also be the core focus of companies’ business strategies before starting this process.

We believe great communications has the power to create a more sustainable future. Get in touch with us at hello@spurwingcomms.com to learn how we can support you with sustainability communications.