Singapore’s Legal Industry Poised to Benefit from Growing Demand for Sustainability Services

The legal industry in Singapore is set to experience significant growth in the coming years, driven by the increasing demand for sustainability services. According to a recent PwC study, the market for legal services related to sustainability will grow substantially, reaching between S$450 million and S$500 million by 2033, nearly tripling from the estimated S$140 million to S$180 million in 2023. This represents an annual growth rate of approximately 10%, as more companies look to meet legal requirements related to carbon markets, sustainability disputes, and environmental compliance.

This growth is expected to be driven by two key factors: emerging legal opportunities in carbon markets and sustainability-related disputes, and the integration of sustainability elements into existing legal workstreams. The first area, which includes carbon markets and disputes related to sustainability, is projected to grow from S$20–40 million to S$110–130 million by 2033. The second area, involving contract drafting and regulatory compliance with a focus on sustainability, is expected to grow from S$120–140 million to S$330–350 million during the same period.

One of the biggest drivers of this expansion is the growth of green finance and capital projects/infrastructure. Legal services related to green finance, including bond issuance, fund structuring, and due diligence, are expected to double to around S$275 million by 2033. This increase will be supported by strong regulatory policies from the Monetary Authority of Singapore, which has been pushing for greater focus on sustainability in the financial sector.

In addition, capital projects and infrastructure, which cover contract management, regulatory guidance, and financial agreements, are also expected to see a significant rise, reaching S$131 million. This growth is fueled by the increasing investment in renewable energy and Singapore's expanding role as a hub for infrastructure development in the region.

As sustainability regulations in Singapore continue to tighten, companies are under pressure to adapt. New regulations, such as mandatory climate reporting for large companies and evolving green building standards, are reshaping the landscape for businesses. International regulations, like the European Union’s Carbon Border Adjustment Mechanism, are also impacting Singapore's legal industry. This regulation requires businesses exporting to Europe to disclose their carbon emissions, pushing local companies to comply with these new standards.

Despite the opportunities, local law firms face challenges in competing with international firms. The PwC study highlights that lawyers need to develop expertise in sustainability-related areas, particularly carbon markets and digital innovations. Singaporean law firms are encouraged to partner with professional service providers and enhance their capabilities to stay competitive in the market.

However, as sustainability regulations become more standardized, certain areas, such as sustainability reporting and compliance, may see a decline in demand. To capitalize on the growth in this sector, law firms are advised to focus on specialization, branding, and forming strategic partnerships.

In conclusion, the growth of the sustainability services market offers significant opportunities for Singapore’s legal industry, but firms must adapt by acquiring specialized knowledge and building strong networks to maintain their competitive edge. By focusing on emerging legal opportunities and investing in sustainability expertise, law firms can position themselves for long-term success in this evolving market.

Source: PwC Study