SMEs hold the key to climate action in Singapore
Climate action can be an opportunity to do good (and do well)
As part of the Singapore Green Plan 2030, Singapore has implemented a slew of regulations and measures to reduce its environmental impact in line with internationally agreed targets contained within the Paris Agreement. The national commitment was recently reviewed and has painted a trajectory of Singapore reaching net zero emissions by 2050, whilst peaking emissions before 2030 and lowering that peak. This requires collective action from all, including businesses in all industries and of all sizes, transitioning their activities, processes and approaches to spearhead new opportunities in the green economy. Without bringing entire business value chains and networks in line, there is no net zero pathway for the economy – in short, there is no meaningful shift to net zero without Small and Medium Enterprises (SMEs).
With SMEs accounting for over 95% of all enterprises in Singapore and more than 70% of the workforce, there is no party better suited to address our country’s climate change issues and seize the business opportunities in this space.
It is a business imperative for many SMEs:
At OCBC, we are seeing a shift in motivation for many of our SMEs. There is now a real conviction that action needs to be taken to improve the environmental performance of business activities. For many, it is becoming a question of longer-term business viability.
So, what should businesses do?
For businesses that have yet to embark on any sustainability initiatives, it can be a crowded and confusing space. It’s easy to become overwhelmed and jump straight into large, complex projects that can often be costly. We advocate for companies of all sizes to break your sustainability journey into smaller, actionable steps. Once you start, each step becomes easier and you will more likely succeed in the bite-sized initiatives you embark on.
Here are some key ideas that can help you develop a robust and actionable sustainability strategy.
1. Be empowered
You have the agency to change your business narrative. Take meaningful steps, seek support and communicate your ‘why’ to your customers and business partners in a clear and compelling manner. Consider saying:
“We want to be sustainable, but it’s a struggle to implement even basic levels of sustainability in our business.”
“What we want may not be possible today, but how can we make it possible tomorrow?“
Focus on one or two areas to start – and improve on these for every project.
“I am one business – I have no impact, I’m not an expert. We want to change but no one else does.”
“We have the potential and responsibility to engage in some of the most meaningful work and improve the quality of lives of those we work with – our customers and our networks.”
Shifting your business narrative will help to motivate change and enable action.
2. Measure & monitor
You can begin by measuring and monitoring your environmental impact. This doesn’t mean jumping straight into “smart” systems. For many businesses, this will typically include tracking energy, water, waste and fuel consumption – data that is readily available and in most cases has the highest impact.
OCBC has collaborated with a range of industry players that we connect businesses to, including the United Nations Global Compact Network (Singapore) which has a free-to-use Carbon & Emissions Recording Tool (CERT) as part of the LowCarbonSG programme. We have also worked with the Building & Construction Authority (BCA) for the Building Energy Efficiency Assessment (BEEA)/SME Energy Assessment (SMEEA), which provides a simple overview of your property’s energy efficiency and predicts the impact of common building energy efficiency strategies, allowing businesses to make informed decisions.
With a baseline measurement of carbon emissions and ongoing monitoring, you will be able to make evidence-based decisions and see its impact, which leads nicely to the next area – optimisation.
3. Optimise your business
Armed with information on your performance, you will be equipped to take actionable and impactful steps. First, focus on areas directly under your control, typically energy and water use, fuel consumption, waste generation, production processes as well as opportunities for low-carbon and renewable energy generation. Next, look at those areas that you may not have full control over directly but can implement meaningful changes. This may include your logistics and transport requirements, third-party production processes and the sustainability initiatives of businesses in your supply chain.
A note on “smart” management systems: You need to have a good understanding of your performance and define your problem statement, before you can put the tools to good use and yield positive results.
4. Communicate your procurement process
Environmental impact is a key factor when it comes to your procurement process and policies. Ensure that there is clear and open communication of the procurement considerations with your supply chain and customers to bring them on board with your journey.
Working with supply chain partners who have taken steps to reduce their environmental footprint while actively avoiding polluting partners, sends a strong message about achieving your sustainability goals throughout the value chain. Communicate this.
Of course, just as you may be evaluating business partners for their environmental considerations, your business would also very likely be subjected to review. There is a tangible business risk in doing nothing.
5. Know that you are not alone
Regardless of where you are in your sustainability journey, you can tap into additional resources, expert advice and funding support to become a greener business. There are grants from Enterprise Singapore, professional support from the SME Centre, and of course, OCBC and its network of strategic partners that span non-governmental organisations, technology partners, as well as solar providers, Energy Efficiency as a Service (EEaaS) companies and consultancies.
A successful strategy leverages communication and communicates what you are trying to do with your stakeholders, value chain and customers. Within the business itself, you might be surprised how many are on the same journey. In the long run, you will benefit from working together and finding solutions collectively to common issues faced.
6. Understand that sustainability should not be a separate pillar in your business
Sustainability ultimately will become a core part of your business rather than an extra layer, an extra effort or an afterthought. Every decision made is a sustainability effort. Bringing the environmental element to the front of mind in any decision will empower you, your business, your staff, your partners and the supply chain to make better holistic decisions that will scale your impact. Communicate these clearly to inform and empower others to do the same.
The OCBC Sustainable Loans and Trade Finance Framework for Small and Medium Enterprises makes it easier for SMEs to access finance to support their climate action
OCBC has created the Sustainable Loans and Trade Finance Framework for Small and Medium Enterprises Framework (“SME SF Framework”) – the first of its kind – which is independently verified by Moody’s ESG as a robust framework. It simplifies the steps needed for businesses to understand and fulfil the required conditions to get green loans and sustainability-linked financing, providing access to tools that enable companies to understand where they are at and take key steps to move forward.
Under the framework, there are nine key green project categories for SMEs tackling the climate crisis:
- Built Environment
- Clean Transportation
- Climate Adaptation
- Circular Economy
- Energy Efficiency
- Environmentally Sustainable Management of Living Natural Resources and Land Use
- Pollution Prevention
- Renewable Energy
- Sustainable Water & Wastewater Management
At the end of the day, our job as your bank is to empower your business to have the agency to take meaningful steps, and access available support and resources to make a real impact. We are your trusted advisor, differentiated through having the technical knowledge and financial services that will provide your business with the best opportunity to succeed.
At OCBC, we support SMEs across all sectors to do well, by doing good. Speak to us today to find out how we can offer you support, advice and partnership to do more.
You may be directed to third-party websites. OCBC Bank shall not be liable for any loss suffered or incurred by any party for accessing such third-party websites or in relation to any product and/or service provided by any provider under such third-party websites.
Any opinions or views of third parties expressed in this article are those of the third parties identified, and not those of OCBC Bank. The information provided herein is intended for general circulation and/or discussion purposes only. Before making any decision, please seek independent advice from professional advisors.
No representation or warranty whatsoever in respect of any information provided herein is given by OCBC Bank and it should not be relied upon as such. OCBC Bank does not undertake an obligation to update the information or to correct any inaccuracy that may become apparent at a later time. All information presented is subject to change without notice. OCBC Bank shall not be responsible or liable for any loss or damage whatsoever arising directly or indirectly howsoever in connection with or as a result of any person acting on any information provided herein. Any reference to any specific company, financial product or asset class in whatever way is used for illustrative purposes only and does not constitute a recommendation on the same.
Discover other articles about: