The top management of small and medium-sized enterprises (SMEs) must recognise sustainability as a high priority and relevant to their business even as surveys show SMEs prioritising growth and survival as critical in the post-pandemic period.
Speaking at a fireside chat at the Singapore Week of Innovation and Technology (Switch) 2022 event held at Resorts World Convention Centre on Wednesday, Transport Minister and Minister-in-charge of Trade Relations S. Iswaran said the road to sustainability for SMEs starts with their top management.
“Making the decision to make sustainability a priority has to come from the top – if it starts from the employees, they may not see the point of doing it as they don’t know if it will be appreciated by their bosses,” said Mr Iswaran.
Small companies must also assess their environmental footprint and decide which aspect to focus on to become greener, he added.
His comments come amid mounting feedback from local firms about the challenges of implementing sustainable practices.
An annual business survey by the Singapore Chinese Chamber of Commerce and Industry (SCCCI) showed that the top three challenges that hinder sustainability efforts by SMEs are the high costs involved, the priority on business survival and a lack of capabilities and resources to understand and implement relevant sustainability practices.
The survey results, which were released on Monday, also showed that 70.8 per cent of the respondents regarded sustainability as important to their businesses to a moderate or large extent.
But most of the respondents, which comprised senior representatives of local businesses across diverse sectors, had incorporated sustainability into their businesses only to a moderate extent.
SMEs accounted for 91 per cent of the 1,057 respondents of the survey, which was conducted from May 30 to Aug 12.
A separate survey of 800 SMEs across six markets in Asia found that eight in 10 SMEs in Singapore rate environmental, social and governance (ESG) as a high priority for their business.
SMEs acknowledge the need for more sustainable business models but are struggling to put their transition plans in place, said Ms Joyce Tee, group head of SME banking at DBS. “This is because the post-pandemic economic environment has meant that business growth and survival are top of mind.”
The survey was conducted by DBS and Bloomberg Media Studios in August.
Although business sentiments have improved compared with last year, businesses have to grapple with manpower shortage, inflationary pressures, rising interest rates and geopolitical risks, said SCCCI president Kho Choon Keng. “Despite these challenges, SMEs must continue to transform, innovate, digitalise, explore growth opportunities overseas and embrace sustainability.”
October 31, 2022
