Within Singapore, SMEs make up 99% of businesses, 70% of its workforce and nearly half of its GDP.1 So whilst being environmentally aware has traditionally fallen to larger companies, SMEs need to face up to the demands of a nation determined to make a meaningful change to the environmental issue.
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.
In saying that, it can be very overwhelming and hard to grasp for any business to embark upon. Here are some tips on how to approach it.
So what constitutes being environmentally-focused? In truth, it covers a variety of elements, but some ways you can consider looking from the top down at your business model include:
Whilst SMEs may have wanted to change, often the cost, time and complexities in accessing green finance has made it inaccessible – until now.
The Singapore government, regulatory, industry bodies and financial sector have been coordinated and single minded in ensuring SMEs can have access to green financing tools.
And we're starting to see the results with a myriad of green financing instruments being specifically designed with them in mind. For example, HSBC has done away with the complexities associated with the traditional green loan process. It is the first bank in Singapore to offer green loans designed specifically for SMEs, by accepting applications based on market-leading 'green' certifications awarded to the business by Singapore industry authorities such as the Singapore Environment Council, the Building & Construction Authority and the Singapore Green Building Council.
SMEs can also now access green deposits too, designed to help businesses align their surplus capital with their green aspirations.
There will be some upfront time and investment needed by SMEs to ensure the right practices are in place to transition their businesses towards greener practices, whilst positively contributing to their financial performance and the broader environment and society.
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.
A contribution piece by Li Lian Ng, Head of Business Banking, CMB, HSBC Singapore. A version of this piece was first published in Entrepreneurs' Digest on 4th June 2020.
1Singapore Department of Statistics, Singapore Economy
2CapitaLand, Global Sustainability Report 2018.