• Singapore's legal industry will benefit from the increase in sustainability services.
• Law firms should be well-prepared to grab the opportunities.

Singapore's legal market for sustainability services will grow enormously, reaching between S$450 million and S$500 million by 2033, notes a new PwC study.

This is triple the estimated size of S$140 million to S$180 million in 2023, with an annual growth rate of 10%. The expansion is driven by growing demand for legal requirements related to sustainability in carbon markets, sustainability disputes, and environmental compliance.

The growth comes from two main areas: 1) emerging legal opportunities, for example, carbon markets and sustainability-related disputes, which are expected to increase from S$20–40 million to S$110–130 million, and 2) the addition of sustainability-related elements to existing legal workstreams, like contract drafting and regulatory compliance, which is projected to grow from S$120–140 million to S$330–350 million over the same period.

Green finance and capital projects/infrastructure will offer the biggest opportunities.

READ MORE: Study: Only 3 in 10 Singaporeans Take Sustainable Actions

The study says that green finance, including legal services for bond issuance, fund structuring, and due diligence, is set to double to about S$275 million by 2033, owing to strong regulatory policies from the Monetary Authority of Singapore.

On the other side, capital projects and infrastructure, covering contract management, regulatory guidance, and financial agreements, are expected to touch S$131 million, driven by increasing investments in renewable energy and Singapore's role as a financial hub for infrastructure development.

Sustainability regulations in the country are becoming stricter. For example, climate reporting for large companies and new green building standards are changing their face for sustainability transition. Also, international regulations like the European Union’s Carbon Border Adjustment Mechanism are redefining Singapore's legal industry, mandating businesses exporting to Europe disclose their carbon emissions, and influencing Singaporean businesses to acclimate and comply.

Amid these developments, Singaporean law firms deal with several hurdles in competing with international corporations. The study highlights the need for lawyers to gain sustainability skills, technical knowledge, and expertise in related areas, particularly carbon markets and digital innovations. Local firms should work with professional service providers and ratchet up their expertise to remain competitive.

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Some areas, particularly sustainability reporting and compliance, may decline once initial regulatory requirements become standardised. The report concludes that law firms should focus on specialisation, branding, and partnerships to maximise opportunities in this growing sector.

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Source: The Business Times