Could you brief us on some of the developments at Golder in the last two years?

Golder has maintained a strong business in Asia over the last two years, though the landscape in 2020 has understandably changed due to the pandemic. In terms of development, we are seeing more synergy between our two main streams of services in the region: geotechnical/ground engineering, which is mostly relevant to mining and infrastructure clients, and the EHS consulting (Environmental, Health and Safety) that pertains more to the manufacturing and oil and gas sectors. We have sought to create a single point of service for our clients by integrating these two streams. It is worth mentioning that while our EHS work within the manufacturing and resources sectors can provide significant opportunities for advances in sustainability, there are also fantastic opportunities from an infrastructure and geotechnical engineering perspective in terms of the decarbonisation of construction projects. For example, we developed alternative engineering solutions that were estimated to save over 400,000 tons of cement use in the reclamation of the third runway at the Hong Kong airport, which roughly translated to 360,000 tons of reduced carbon dioxide emissions. Though not “badged” as environmental work, this has a positive impact on the community, and it should not be taken for granted. Similarly, in Singapore, our team has been instrumental in helping numerous contractor clients to optimise their construction design, helping them reduce the use of materials and save costs. This has in turn help their projects to be more competitive and reduce their carbon footprint.  

How has the pandemic affected the chemicals business?

In the last year, COVID-19 and the oil price collapse hit the industry hard. With the economic outlook revised down, the outlook for chemical demand is also adversely affected, generally translating to an oversupply. The stimulus injected by economies around the world, together with low interest rates, led to increased liquidity in the market, which drove increased mergers and acquisitions (M&A) activity as stressed chemical companies, amongst others, seek support through market consolidation.

What do you identify as some of the long-lasting trends related to the adoption of remote work practices and technologies?

I believe the first few months into the pandemic were particularly difficult for everyone. That was mostly due to a general lack of business continuity planning, resistance to change, as well as confusion and scepticism. With time, it became evident to most businesses that they could not afford to wait until travel restrictions were lifted or a vaccine rolled out. Today, much of the EHS assessment work we do at Golder has pivoted to “virtual / remote” assessments. We have innovated and learned to coordinate with site representatives and to rely more on real-time technology. On one side, we are saving time, carbon and costs related to traveling, but on the flip-side, not all assessments can be executed remotely, whether because of a simple issue of lack of trust or the need to follow prescribed assessment protocols that include physical field presence. Therefore, in balancing our clients’ risk profile, physical presence is sometimes required to evaluate material aspects. Regardless of how the pandemic will eventually play out, however, remote assessment practices and technologies are likely to set a “new normal” for the industry.

How do you think digitalisation is propelling the globalisation of services?

Our main Asian markets remain in Singapore, China, Hong Kong, India and Indonesia, but an interesting trend amongst service providers is the greater understanding and leveraging of technology to tap into different geographies. Partly accelerated by the pandemic, the execution of EHS provisions, for instance, has become flatter, more virtualised, and global. Together with the realisation that work can be done virtually and without shaking hands, the thirst for better smart tech, data transfer and digital solution platform options will only continue to catapult our industry post-COVID.

How is Singapore positioning in the region?

Singapore is a key financial hub and a central location for business deals within Asia. It is also a major manufacturing hub for the chemical and pharmaceutical industries, in which Golder has key global and regional clients. While Singapore is well-positioned to take advantage of South East Asian markets, Shanghai is seen as a competitor as it has more traction in Northern Asia. Combining the volume of South East Asian markets and the value of these assets, we are looking at a phenomenally large and buzzing market. China is a market unique to itself, and its fast regulatory changes, especially on data transparency, carbon reduction initiatives, community safety and ESG reporting, together with its huge population, are important driving forces for the chemicals sector and Singapore will need to stay competitive with these practices.   

What is the industry’s role in driving change from an ESG perspective? 

Since the Paris Agreement, reviews suggest we are still far from achieving the quantum of green investments needed to adequately curb climate change. Governmental and regulatory drivers for ESG and, particularly, climate change mitigation can sometimes be mild and there is a general lack of accountability for the Paris Agreement signatories. While there are several recognised guidelines of ESG and carbon-related data disclosure, the Taskforce on Climate-Related Financial Disclosures (TCFD) has been one that is gaining momentum in the last few years. The TCFD is not a country-based regulatory initiative, but rather a largely industry-based organisation that aims to inform stakeholders of carbon-related assets within the financial sector and its exposures to climate-related risks. From this respect, climate change commitments can be pushed from a different angle: the vast capital from the private sector will not invest its money unless there is sufficient data transparency to understand risks related to climate change, a clear standard for reporting, and what it is done about it. The United Nations’ initiatives, the Paris Agreement, and government policies have already pressured companies, but sometimes these guidelines may be inconsistent amongst their proponents. The private sector adds another muscle, which is a monetary one rather than political. At Golder, we incorporated a strong element of sustainability within our due diligence services to support M&A transactions.   

What are your observations regarding the M&A market?

In 2020, the global M&A market in terms of pure transaction volume has been lower compared to the previous year for obvious reasons. Those who committed to deals prior to the pandemic were strung out during lockdown months, while those who had not signed beforehand were compelled to postpone their deals due to market uncertainty. Money markets are hedged against uncertainty, so I expect that once there is more clarity around the vaccine and economic recovery, M&A activity will take off quickly because there is a lot of floating capital and many stressed assets awaiting to be picked up. Going back to the previous point, greater consolidation will also offer a chance for companies to revisit their EHS and ESG practices and improve governance. I strongly believe that the next two to three years will be a period of accelerated consolidation for many industries.