8 November 2021

Staying relevant as sustainability soars

Is there any other country whose national character so closely identifies with the notion that “no man is an island”? From a quiet fishing village with few resources, Singapore - out of a “backs-to-the-wall” necessity - has gone through immense change, adaption and re-invention.

Corporate resilience has become synonymous with the low-carbon transition, and is creating a wealth of untapped growth opportunities for businesses. Yet a key issue in adoption has been that a lot of the financial instruments are targeting the big end of town, with fewer options for smaller corporate players and enterprises, who are essential players in the development of a green finance ecosystem.

A large reason behind this is that sustainable finance is still at a relative nascent stage compared to traditional forms of finance. Put simply, there is a lot of noise in the market – so how do smaller enterprises, who might not have the funds or the dedicated functions, get started, and why do they need to now?

The armory of sustainability tools available to Singapore firms has accelerated at a remarkable pace, opening up access to the entire business ecosystem, but with it brings new competition. The challenge now will be in acting quickly and meaningfully enough to stay relevant.

Dialing up the pressure on enterprises

Regulatory changes, heightened consumer awareness and the increased demand from institutional investors is pushing many companies to explore how sustainable finance can be used to support their business objectives, throughout the ecosystem.

HSBC’s ASEAN Sustainable Finance & Investing survey shows that some 65% of ASEAN issuers said they will actively seek advice on green, social or sustainability issues in relation to capital markets transactions in the next 12 months1. This is causing a trickledown effect; SMEs within the supply chains of larger corporates are now being held accountable for their sustainability practices.

Sustainability is also emerging as an additional factor for businesses when attracting staff, according to HSBC’s Navigator survey2. For smaller enterprises, that means battle for talent is on. The survey also reveals that job hunters factor the sustainability credentials of an employer into account more highly than previous years, meaning firms need to prove their strategies to draw the best talent.

These drivers combined are generating more interest from smaller firms in sustainable finance solutions.

Realising value and opportunity

Our latest Navigator survey shows that whilst Singapore firms have historically been behind the curve in identifying a social purpose, they are now accelerating their plans.

There will be some upfront time and investment needed by businesses to ensure the right practices are in place to transition their businesses towards greener practices. The task is to implement CSR policies that are meaningful and holistic; businesses must look to how it forms part of a wider plan to engage with operational, employee, financing and community needs.

Scaling up sustainability in Singapore

Businesses in Singapore looking to make the transition now have a plethora tools at their disposal. Public institutions are playing a driving role to support businesses in their sustainability efforts, for instance in developing sector-specific frameworks and incentivizes to encourage innovation in renewables, or by issuing sovereign and statutory board green bonds as a means to spur private enterprises into action.

The Singapore government, regulatory, industry bodies and financial sector have been single minded in ensuring its efforts to bring businesses of all sizes into play when it comes to green financing.

We recently became the first bank in Singapore to leverage the Enterprise Finance Scheme-Green (EFS-Green) in order to issuance finance. This is a direct, measurable scheme which will channel capital towards eligible businesses that are working towards the shift to a lower carbon economy3.

The scheme is a true door-opener for enterprises in Singapore and enabled us to extend a S$6m green trade loan to Durapower Group, enable the Singapore SME to accelerate the development and distribution of high-tech energy storage solutions using lithium-ion batteries for the Tuas Mega Port’s Automated Guided Vehicle fleet, a key element in creating a greener port through sustainable, smart and clean energy solutions4.

EFS-Green provides up to 70% risk share to catalyse lending for emerging Green Growth Sectors aligned to the Singapore Green Plan 2030 and which develop technologies and solutions contributing to the reduction of waste, resource use or greenhouse gas emissions.

Earlier this year the Monetary Authority of Singapore launched the Green & Sustainable Trade Finance and Working Capital (GTF) Framework, a guide for banks and financial institutions in extending green financing to buyers and suppliers.

We have since supported several businesses, including extending a green trade loan under the GTF Framework to World Metals, a Singapore SME in the metal recycling industry to support the financing of the refinery and recovery of precious metal from e-waste5.

These are significant developments and here are many further examples to support firms, including the Green and Sustainability-Linked Loans Grant Scheme6 . However, transitioning to more environmentally-focused business models isn’t something SMEs should feel compelled to do out of obligation but rather they should do it because it makes good business sense. Businesses should lean on the government’s increasing armory of capabilities to explore what fits with their overarching sustainability strategy.


Singapore’s smaller businesses have a right to own this space: the country is one of the world’s leading financial capitals and its public institutions are paving the way for sustainability adoption. Singapore has developed a range of means to do this, it’s now time for business owners to grab hold of them to win a competitive advantage in the short and long term.

Firms must act now; those that align their strategies to the transition will be reap the rewards. Those that fail to adapt will be left behind.

A contribution piece by Regina Lee, Head of Commercial Banking, HSBC Singapore was first published in The Edge on 6th November 2021.