UOB, EnterpriseSG launch programme for SMEs to secure sustainability-linked financing

SMALL and medium-sized enterprises (SMEs) can pursue sustainability performance targets and obtain preferential loan rates from UOB, in a new programme launched by the bank and Enterprise Singapore (EnterpriseSG) on Wednesday (Jun 12).

The Sustainability-Linked Advisory, Grants and Enablers (Sage) Programme aims to help SMEs reduce the time, cost and resources required to set sustainability performance targets and secure financing.

Under the Sage Programme, SMEs can select from three options of pre-defined, sector-specific sustainability performance targets to obtain sustainability-linked financing from UOB.

They can choose to pursue one – or more – of three targets: the reduction of greenhouse gas (GHG) emissions; certification of management systems; or the improvement of environmental, social and governance (ESG) ratings. They will then work with the programme’s appointed sustainability service partners – CDP, Convene ESG, M1, Paia Consulting, PwC Singapore and TUV SUD – to achieve these targets.

All targets have been validated by a second-party opinion partner – Environmental Resources Management – to ensure credibility and alignment with globally recognised sustainability-linked loan principles.

With the time and costs saved from pursuing pre-set targets with UOB, SMEs can instead “redeploy their resources and attention to actual implementation”, said Frederick Chin, UOB’s head of group wholesale banking and markets, at the programme’s launch.

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Participating SMEs that achieve their targets will also receive preferential pricing from UOB’s network of preferred sustainability partners and support from EnterpriseSG.

This will allow them to defray up to 85 per cent of the costs of the ESG digital platform, advisory and assurance services for GHG inventory, certification of ISO management systems, and enhancing ESG performance disclosures to meet their targets.

The Sage programme was developed to address concerns from businesses that were highlighted in the recent UOB Business Outlook Study 2024 (SMEs & Large Enterprises).

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Only four in 10 businesses adopted sustainability practices, the survey found, citing key challenges such as increased costs, insufficient knowledge and lack of manpower.

EnterpriseSG managing director Cindy Khoo said businesses need to adjust to meet new sustainability requirements as procurement specifications change.

She noted that large corporates and the public sector have already taken steps to include sustainability considerations in their tenders and projects to meet net-zero targets, such as imposing requirements on their suppliers’ Scope 1 and 2 emissions.