[SINGAPORE] Singapore’s sustainability legal services market is set for significant expansion, with its value projected to treble to between S$450 million and S$500 million by 2033, indicated a study by professional services firm PwC.
This marks a substantial increase from an estimated size of between S$140 million and S$180 million in 2023, said the report, which was released last Wednesday (Mar 26).
It is forecast to grow twice as fast as the overall legal industry in the decade up to 2033, with a compound annual growth rate of 10 per cent per annum.
The opportunities are expected to come from entirely new legal workstreams created by sustainability-related requirements, such as carbon markets and sustainability-related disputes, which is projected to increase from the current size of between S$20 million and S$40 million to between S$110 million and S$130 million.
Another set of opportunities are likely from additional sustainability requirements and elements being introduced to existing legal work, which includes contract drafting with sustainability clauses. These are expected to grow from the current market size of between S$120 million and S$140 million, to between S$330 million and S$350 million over the same period.
The key growth drivers are: regulatory influence, incentives and penalties; Singapore’s sustainability track record; the voluntary adoption of sustainability targets; and Singapore lawyers’ influence in South-east Asia.
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The study, which gathered the perspectives of 66 sustainability legal industry stakeholders, was conducted by PwC Singapore to assess the sustainability-linked opportunities for Singapore lawyers over the next decade. It was commissioned by the Economic Development Board, Enterprise Singapore and the Ministry of Law.
Key trends
The study pointed out six key areas of sustainability legal work in Singapore: sustainability reporting and compliance; green finance; capital projects and infrastructure; carbon markets; green technology and digital innovation; and sustainability disputes.
Green finance, as well as capital projects and infrastructure, present the largest legal opportunities for lawyers, indicated the study.
The value of legal services in green finance is projected to double to approximately S$275 million by 2033. This sector encompasses key financial services such as bond issuance, fund structuring and legal due diligence.
The expansion of green finance is being propelled by regulatory frameworks established by the Monetary Authority of Singapore, alongside the increasing integration of sustainability considerations into investment funds in Singapore. More than 50 per cent of assets under management are already integrating sustainability considerations into their investment processes.
Meanwhile, capital projects and infrastructure are forecast to reach a size of S$131 million by 2033. This sector includes vital services such as regulatory guidance, contract management, financial agreements, and structuring advice. Its growth is largely driven by South-east Asia’s ambitious renewable energy goals, which are accelerating annual clean energy investments, as well as Singapore’s strategic role as the region’s infrastructure financing hub.
The study highlights the need for legal professionals to upskill, particularly in the areas of technical expertise and industry-specific sustainability knowledge, so as to capitalise on these opportunities.
Notably, sustainability legal services in entirely new legal workstreams such as carbon markets, sustainability disputes, reporting and compliance, as well as technologies and digital innovation, demand a deeper level of technical proficiency than those where additional requirements are being introduced to existing legal work.
The report added that Singapore lawyers are also well-positioned to tap into immediate opportunities in green finance, capital projects and emerging fields such as technology and digital innovation, where legal services include intellectual property strategy, advisory work and objection responses.
While most sustainability-related legal markets are expected to expand, sustainability reporting and compliance are an exception. After growing from an estimated S$6 million in 2023 to S$16 million by 2028, this segment is predicted to shrink to S$3 million by 2033. The decline is attributed to a decreasing demand for advisory services on new sustainability reporting regulations, as initial compliance frameworks become standardised over time.
Regulations
On the regulatory front, the Singapore government has introduced new obligations, such as climate reporting and assurance requirements for listed issuers and large non-listed companies.
Additionally, regulatory updates for new and existing buildings undergoing major renovations now mandate minimum sustainability standards.
Beyond local policies, developments in global sustainability regulations are also shaping Singapore’s legal landscape. A key example is the European Union’s Carbon Border Adjustment Mechanism, which requires importers to disclose the emissions of their imported goods, compelling non-EU suppliers – including Singapore companies – to measure and disclose their carbon footprints.
Despite the promising growth in sustainability-related legal services, local law firms face challenges, particularly in closing the knowledge gap and enhancing their credentials relative to international firms, the study found.
The report recommends that local firms deepen their expertise, collaborate with other professional service providers on thought leadership initiatives, and adopt a company-wide branding strategy to strengthen their market position.
