While the unrelenting cry for businesses to adopt more sustainable practices continues to ring out, SMEs in Singapore have revealed that their top challenge transitioning to more sustainable business models is balancing ESG goals with growth targets for their business (63%).
This was followed by cost pressures when deploying ESG investments (61%) and a lack of access to technical know-how and ESG specialists (60%).
An inaugural survey of 800 SMEs across six markets in Asia conducted by DBS and Bloomberg Media Studios in August, found that SMEs in Singapore led their regional counterparts with more than eight in 10 of them rating ESG a high priority for their business.
They also reflected that climate change leading to a depletion in natural resources (85%) was the top issue they wanted to address in the coming year. This was followed by waste reduction (63%) and employee health and safety / work-life balance (56%).
Joyce Tee, Group Head, SME Banking, DBS said that through the hundreds of interviews done with Bloomberg, one thing was clear: SMEs acknowledge the need for more sustainable business models but are struggling to put their transition plans in place.
This is because the post-pandemic economic environment has meant that business growth and survival is top of mind.
SMEs trying to transition to more sustainable business models are also finding that there is a lack of standardised measurement in reporting standards (75%), lack of technical know-how in the market on how to implement ESG frameworks and solutions (70%) as well as lack of funding (48%).
Tee added, “Unclear reporting and emissions measurement requirements often hinder SMEs’ ESG journeys. The lack of homogenous frameworks and standardised guidelines leads to wide discrepancies within and across industries, and markets, when measuring success and performance.
“We understand that SMEs face many challenges especially when transitioning to more sustainable business models. It is imperative that SMEs successfully make the transition.”
SMEs in Singapore are ready to transition as close to eight in 10 acknowledged that more sustainable business models benchmarked against international standards would increase their competitive edge by enabling them to attract more business from larger companies.