More can be done to drive sustainability efforts at SMEs: Isca pre-Budget panel

TO ENCOURAGE the sustainability efforts of Singapore’s small and medium-sized enterprises (SMEs), Budget 2023 could provide funding for the hiring of sustainability officers, suggested panellists at a pre-Budget roundtable on Thursday (Jan 19).

Organised by the Institute of Singapore Chartered Accountants (Isca), the panel was co-chaired by Members of Parliament Liang Eng Hwa and Don Wee. Liang, who chairs the government parliamentary committee for finance, trade and industry, noted existing government moves to encourage sustainability, such as the carbon tax and the Enterprise Sustainability Programme.

However, Singapore Manufacturing Federation president Lennon Tan said a “shock” to the sustainability ecosystem here was necessary to get SMEs going. Citing the appointment of Singapore’s first government chief sustainability officer this year, Tan said it was “timely” for SMEs to consider having sustainability officers too.

One possible form of help in the upcoming Budget 2023 would be a scheme that helps to fund the headcount of a sustainability officer, he suggested.

A sustainability officer would help SMEs craft concrete environmental, social, and governance (ESG) policies. SMEs would also be better equipped to measure their carbon impact, which may sometimes require funding for “engineering solutions”.

Agreeing on the importance of sustainability officers, UOB head of research Suan Teck Kin suggested creating a government body to train and certify such positions.

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This is because the concept of a sustainability officer – especially a top level position – is a “whole new category of C-suite”, Suan said, noting that Singapore can take the lead in this to set an example for the region.

Another possibility is incentivising multinationals and listed firms – which typically have dedicated ESG teams – to aid SMEs in sustainability efforts. In this “reverse domino” concept, these large companies would be “pushing everyone up”, PricewaterhouseCoopers Singapore sustainability and climate change leader Fang Eu-Lin told The Business Times (BT).

“I think that those with more resources – and it is also more equitable – can actually create more impact, and should do their part,” she added.

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SGListCos pro-tem chairman Chew Sutat proposed that listed companies could require their SME vendors to make sustainability commitments.

However, SMEs may not always have control over their sustainability impact, said Singapore Retailers Association treasurer Pang Fu Wei. He noted that the vast majority of the retail sector’s carbon footprint is spread across the supply chain, with most of the impact coming from suppliers and shipping companies.

“The vast majority of retailers in Singapore are SMEs, and we really cannot afford to pick and choose who our suppliers are,” Pang told BT.