Sustainability for success? 3 in 5 SMEs agree
SMEs said having sustainable practices can improve their reputation amongst others.
Three in five small- and medium-sized enterprises (SMEs) believe that incorporating sustainability practices in their business will help them grow and improve, the UOB SME Outlook Study 2022 showed.
SMEs said having sustainability as a core could help improve their reputation (54%), make working with multinational corporations concerned with sustainability goals easier (45%), and enable them to help build an environmentally- and socially-responsible Singapore (44%).
Amongst environmental, social, and governance (ESG) practices SMEs plan to implement are clear operational policies and processes such as risk management and financial control (45%), more efficient use of resources to minimise waste (43%), and use of energy-efficient equipment and technologies (35%).
Apart from ESG practices, SMEs, particularly those in whole trade (98%), said they are also aligning their initiatives to the Singapore Green Plan 2030 by stepping up recycling efforts (60%), training employees in climate risk or environmental protection (60%) and switching to energy-efficient sources to reduce carbon footprint (56%).
Meanwhile, companies in construction and infrastructure (98%) are increasing their recycling efforts (41%) and applying for green certification schemes (39%). Real estate and hospitality companies, on the other hand, are looking mainly to reduce packaging waste (42%) such as single-use plastic.
The road to sustainability, however, isn’t an easy one, especially for SMEs who said they either have insufficient knowledge to identify and to execute relevant initiatives for their organisation (40%) or inadequate non-financial support such as sustainability training (33%).
In particular, small businesses are also concerned about the potential increase in cost for their end customers (31%) and inadequate financial support from the government and banks for such initiatives (31%). Meanwhile, medium-sized businesses said inadequate non-financial support (47%), insufficient knowledge (46%) and the possible impact on short-term revenue (44%) are their key barriers to adopting sustainable practices.
To help address these concerns and deepen their capability, 43% of SMEs said they are looking for collaboration opportunities with industry bodies, government-linked companies or large businesses, while 39% are seeking connections to industry peers and ecosystem partners, and 38% plan to tap training or solutions providers.