For SMEs, going green Is critical but they face multiple challenges

DBS and SBF want to change mindsets and guide firms’ sustainability journeys

- Sue-Ann Tan

Singapore's small and mediumsized enterprises (SMEs) want to go green, but the question is how, amid a dizzying array of certifications and methods, and the lack of technical expertise.

And while they are unsure how to begin, it is vital that they start their carbon measuring and reporting, said Singapore Business Federation (SBF) chief executive officer Kok Ping Soon, adding that pressure is increasing on small firms along the supply chain as they contribute to bigger companies' emissions.

He was detailing the top challenges that SMEs face in an exclusive interview with The Straits Times, alongside DBS Bank group head of corporate and SME banking Koh Kar Siong.

Mr Kok said that companies were ready for a low-carbon environment, but they cited access to funding, clarity on environmental, social and governance (ESG) reporting matrices, and availability of technology to measure their initiatives as their key concerns.

"We also want to change the mindset of SMEs. A lot of SMEs are looking at it as a compliance thing, but it's a matter of business survival," he said.

He added that this is particularly an issue if ESG has an impact on the business, such as for those in the tradable sectors, where the small companies account for the Scope 3 emissions reporting of big companies. Scope 3 emissions are not produced by a company itself, but indirectly by other organisations up and down its value chain.

The certification space also remains messy, he said, adding that SBF wants to help manufacturers and businesses by creating a green excellence mark that they can rely on. The organisation has brought in the Institute of Singapore Chartered Accountants for credibility and assurance, as well as the Agency for Science, Technology and Research as the technical body.