Over 80% – or eight in 10 – of small- and medium-sized enterprises (SMEs) in Singapore were found to place environmental, social and governance (ESG) principles as a high priority in their business, says a survey conducted by DBS and Bloomberg Media Studios.
The inaugural survey was conducted among 800 SMEs across Singapore, Hong Kong, India, Indonesia, Mainland China and Taiwan in August.
According to DBS, the survey also found that climate change leading to a depletion in natural resources was a top issue among Singapore SMEs, with 85% of them surveyed stating that this was an issue that they wanted to address in the coming year.
Waste reduction (63%) and employee health and safety / work-life balance (56%) rounded up the top three issues identified by Singapore SMEs.
While Singapore SMEs are keen on solving the abovementioned issues, they note that their top challenge transitioning to more sustainable business models is balancing ESG goals with growth targets for their business, with 63% identifying this as a top issue.
This was followed by cost pressures when deploying ESG investments (61%) and a lack of access to technical know-how and ESG specialists (60%).
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According to the survey, SMEs looking to transition to more sustainable business models are experiencing several issues. These are: a lack of standardised measurement in reporting standards (75%), a lack of technical know-how in the market on how to implement ESG frameworks and solutions (70%) as well a lack of funding (48%).
It adds that as close to 80% of SMEs in Singapore 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.
Joyce Tee, group head of SME Banking at 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.
“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,” she adds.
