Third run of SBF’s SME transformation programme focuses on sustainability

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THE Singapore Business Federation's (SBF) transformation programme for small and medium-sized enterprises (SMEs) will focus on sustainability in its third edition.

At a Tuesday (Sep 20) launch to announce the new theme under the MAP initiative, which offers workshops and events, SBF said the area of focus was chosen in light of the growing global demand for green material, products and processes. The first 2 runs of the initiative were sector specific, looking at positioning the wholesale and retail trade sectors for recovery and growth post Covid-19, and driving digitalisation and transformation of the logistics sector.

"Sustainability is increasingly a critical and integral part of business strategy for businesses," said Lam Yi Young, chief executive officer of the federation. "The third run of our MAP initiative brings together partners from both the private and public sectors to help guide and support businesses, in particular SMEs, on their sustainability journey."

The new run is expected to benefit over 500 participants from 300 companies. The MAP initiative, which aims to break down lofty business transformation goals into modular steps, has helped more than 600 SMEs since March 2021.

SBF said participants will gain exposure to the ways other businesses have approached emission reduction, be provided with tools to measure energy consumption and carbon footprint, and glean solutions that can reduce the consumption of traditional sources of energy.

The Energy Market Authority, Workforce Singapore, TotalEnergies ENEOS, T-RECS.ai and SKP will come together to host a seminar covering topics such as efficient energy management, the benefits of carbon credits and renewable energy certificates, and the importance of developing in-house sustainability expertise.

Separately, the Infocomm Media Development Authority will hold a design thinking workshop to help businesses synergise their company strategies with decarbonisation. SP Digital will, meanwhile, share how businesses can leverage digitalisation, analytics and in-house solutions to manage utilities and costs efficiently. 

The initiative is organised in partnership with Singapore sovereign wealth fund GIC.

Rachel Teo, GIC's head of sustainability and head of total portfolio sustainable investing, said this edition integrates GIC's investing principles on long-termism, values, strengths and risks, and highlights the "critical need" for SMEs to adopt sustainability in their business practices and join the fight against climate change.

Speaking as a panellist at an event to launch the MAP initiative on Tuesday, Teo stressed that sustainability has become the driver of both business and investment risk and opportunity, so companies should see its value, "start small and let it scale".

This comes as more large corporates are imposing sustainability standards on their suppliers, including requiring validation from ratings agencies such as EcoVadis, a GIC-backed sustainability data company, she said.

"Companies that are poorly rated on sustainability ratings may lose out on gaining large corporate accounts as their clients," Teo said.

Costs are also rising for businesses that fail to decarbonise, she said, noting that regulatory requirements are increasingly causing externalities to be priced by markets, while government policies are also making the cost of externalities more explicit.

"Carbon pricing now covers 23 per cent of global greenhouse gas emissions, up from just below 2 per cent 2 decades ago," she added.

Meanwhile, fellow panellist Matthew Song, senior vice-president and head of corporate and institutional clients at the Singapore Exchange (SGX), said capital formation and access to capital are now "linked very closely" to ESG.

Investors are increasingly requiring some form of environmental, social and governance (ESG) implementation, and the debt financing side - banks and fixed income investors - is also ensuring that companies have some form of ESG framework, he noted.

Cheng Yee Chin, regional general manager of corporate gift manufacturer DTC World Corporation, said business has grown 30 per cent since the company embarked on its sustainability journey in 2016.

DTC, which boasts Nestle, KitKat and Heineken as its clients, started this journey when it faced pressure to complete a certification process for it to remain an approved supplier of a key customer.

Shortly after, in 2017, the company started noticing a focus on sustainable sourcing among many companies in the region, and recognised that it could leverage on sustainability as its key business differentiator.

"For SMEs, we always have many things on the plate that always seem to be more urgent than sustainability. But because we are business owners, we cannot just focus on short-term business growth. We need to look beyond that. We need to know what we need to do to keep the business in the game," Cheng said.

the task might seem daunting, Cheng said most SMEs already have some sustainable practices in place - such as providing employees with a safe working environment and paying them on time.

What is lacking is writing the sustainability aspects - labour and human rights, business ethics, office environment, promoting sustainable consumption as well as sustainable procurement - into policy and action plans and measuring their performance, she said.

"All we need to do is to get ourselves started on the sustainability journey. It's a never-ending journey, so the most important thing is just to get started," Cheng added.

"The sooner you start, the better for your business."

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