BUSINESSES should take the initiative and invest in making their operations more environmentally friendly, National Development Minister Mah Bow Tan said yesterday.

Those that learn to be more resource-efficient ahead of the competition can gain a 'first-mover advantage in a new carbon-constrained world', he said.

The minister told a 500-strong audience at the annual Business for the Environment Global Summit that this competitive edge did not have to come at the expense of profits.

Singapore, for example, has an energy efficiency improvement scheme that has helped 87 manufacturing plants save $23 million in annual power bills through energy audits, said Mr Mah.

To build the Republic into a sustainable development hub, he said, a 'third pillar' was needed: People and businesses must drive local efforts towards sustainability.

Climate change expert Achim Steiner, the executive director of the United Nations Environment Programme (UNEP), said there had been a 'major shift' in business attitudes, with investments pouring into researching ways to increase energy efficiency in business operations.

But 'environmentalists must become more economics-literate, while economists must become more environmentally aware', he said at the two-day summit.

The summit was staged with the UNEP Champions of the Earth 2008 awards ceremony last night. This year's laureates include Prince Albert II of Monaco and New Zealand Prime Minister Helen Clark.