AS Singapore's economy mends and green shoots emerge across industries, the time is ripe for Singapore's small businesses to gear up for the green economy. The measures announced by Deputy Prime Minister and Finance Minister Heng Swee Keat as part of Budget 2021 on Feb 16 underscore the role businesses have in Singapore's ambitious Green Plan 2030 roadmap towards an environmentally sustainable future.

These include grant support for waste minimisation and recycling projects, and for businesses looking to raise energy efficiency at their operations, as well as the enhanced investment allowance for emissions reduction to support manufacturing companies.

Of note in his speech was the launch of the Enterprise Sustainability Programme to encourage businesses, particularly small and medium-sized enterprises (SMEs), to use resources more efficiently and seize opportunities in the growing global green economy.

As we await details of this new programme from the Ministry of Trade and Industry, it would be useful to note that there already exists a high level of awareness across Singapore's SMEs about the importance of environmentally sustainable business practices.

It is an awareness that goes beyond grudging nods at a list of good to-dos, to a genuine appreciation of what sustainability efforts entail - from industrial companies exploring renewable energy and sustainable wastewater treatment, to manufacturers, distributors and retailers alike considering their supply chain and logistics processes.

This appreciation arises from a convergence of several factors: the improving cost-benefit matrix of adopting sustainable practices, raised regulatory and compliance standards in various sectors and export markets, excitement over the explosion of innovative solutions in the green space, and added impetus offered by green financing options.

Globally, environmental sustainability in business has been led by larger institutions and corporations.

Not necessarily because of an elevated social or environmental conscience, but because they are subject to greater pressure from investors and others by virtue of their visibility and impact.

That is right and good - that larger businesses that can afford dedicated resources to build expertise in sustainability lead the way.

Many have done just that. But the myriad smaller enterprises that form the backbone of economies, that stabilise long supply chains, are critical to society's efforts to become more environmentally sustainable too.

Thankfully, as technology evolves, the pursuit of sustainability has become more and more commercially feasible for them.

For instance, the costs of using technology to consume energy more efficiently have fallen, while the value of investing in green building infrastructure - from windows to lighting to air-conditioning - grows clearer.

These are some ways in which cold, hard numbers now make even more compelling the rhetoric surrounding businesses' role in addressing climate change, and are changing the framework within which even small businesses and their pragmatic business owners and leaders now factor environmental sustainability into their business decisions.

Agents of sustainability

The current global pandemic - and the shock it delivered to the global economy and businesses - has generated reflection on questions of sustainability too.

Businesses that have weathered the storm are considering their future resilience through new lenses, calling into question decisions that would otherwise have been taken for granted.

Others, pushed to seek out new customers and markets, may also have had to pivot to meet new customers' higher requirements when it comes to sustainable sourcing.

While initiatives to improve energy efficiency, reduce waste, and better wastewater management are ones that SMEs across industries can adopt, the fast-growing market for green products and solutions has also birthed companies that are themselves agents for environmental sustainability.

Local examples of "pure play" green SMEs - whose core product or service serves the environmental goal - include Uniseal Global, a green products developer, manufacturer and wholesale trader of greenery products relating to green roofs and walls, storm water management solutions and landscape engineering systems, and Env Tech which designs and builds equipment and systems for water, wastewater and biosolids treatment.

Green loans

Capital is a key enabler, and progress in green finance in Singapore will no doubt provide SMEs with added impetus to embark on sustainability efforts or pivot to pursue green business opportunities.

The government has said it will be issuing green bonds on public infrastructure projects to aid the growth of the Singapore Dollar corporate green bond market.

And as part of a broader green finance plan, the Monetary Authority of Singapore has also rolled out a Green and Sustainability-Linked Loan Grant Scheme to support companies of all sizes by defraying the costs of hiring independent service providers to validate the green and sustainability credentials of loans.

This scheme has also supported banks like ours to develop green and sustainability-linked loan frameworks to make it simpler for SMEs to access financing for their sustainability plans.

It was, in fact, under our new SME sustainable finance framework that Uniseal secured a green loan to develop and expand its offering of greenery products to the global market, while Env Tech's green loan powered a new contract for a scum removal system at Changi Water Reclamation Plant.

And companies are responding to this - a sure sign that a growing number see going green as making good business sense when capital is available.

Over the last two years, OCBC has financed SMEs and mid-cap companies across the region, supporting over S$1.6 billion worth of projects in green buildings, hospitality, construction, solar energy and more.

Sustainability is a journey, not a destination. And as governments, institutions and individuals globally commit more resources to an environmentally sustainable future, it is imperative that businesses - even smaller ones - embark on their own sustainability journeys.

Here in Singapore, SMEs can take advantage of government grant support and expanded green financing options to ready themselves for the future green economy and its opportunities.

Written by Linus Goh, Head of Global Commercial Banking, OCBC Bank