Today’s business leaders are shifting the dialogue surrounding sustainability, which has grown more prominent in recent years. Motivated by changing consumer loyalties, new regulatory pressures, and the push for more resilient supply chains, the current economic and environmental climate are causing businesses and nations to be concerned about survival and growth. 

This transformation is particularly dynamic in Southeast Asia, given the region’s susceptibility to climate change and its rapid economic growth. The region’s green economy could unlock up to US$1 trillion in annual economic value by 2030, presenting a significant opportunity for us to leverage increased sustainable developments. Within this environment, forward-thinking small and medium-sized enterprises (SMEs) in Singapore are emerging. Supported by the nation’s commitment to innovation, these businesses are proving that embracing sustainability in Southeast Asia is not just about managing risk, but about ensuring we can build a more resilient future beyond.

Digitalisation and green tech are leading the change

For a resource-constrained nation, Singapore has long been able to turn its weaknesses into strengths. Other countries may be able to invest in solar farms, or wind turbines, whereas Singapore has championed digital sustainability as its competitive edge.

Singapore’s investments towards a world-class digital infrastructure is beyond a national project. The Singapore Green Plan 2030 has formed the foundation for SMEs to explore more opportunities in the areas of sustainability without massive upfront investments. In essence, Singapore focuses on reducing the energy and resource consumption of key digital infrastructure, tapping into tools such as cloud computing, data centres and software applications that allow for leaner and greener operations. Think of it as laying down digital highways for businesses that are cleaner. This digital backbone gives SMEs the power to monitor their carbon footprint, opting for more sustainable choices that benefits them in the long-run.

The result? SMEs in Singapore are exploring opportunities to become green innovators. We’re seeing more sustainable technology solutions, thanks to a new wave of companies exploring green tech like waste-to-energy solutions, urban farming and sustainable packaging. These businesses are now playing a vital role in developing innovative workarounds to meet sustainability objectives.

As these Singapore-based solutions prove themselves, the business model is now being replicated by SMEs across Malaysia, Thailand, Vietnam and beyond. Each success story here becomes a case study that helps the region see what’s possible. We’re becoming an R&D lab for sustainable business practices throughout Southeast Asia.

How SMEs are navigating the barriers to green adoption

Let’s be real… sustainability for businesses is not a walk in the park, especially for SMEs. The path is often blocked by a few common hurdles. 

While we’ve mentioned that Singapore’s investments in the digital economy have made green tech adoptions more cost-effective for SMEs, financial capital is still a big struggle they face. Overhauling supply chains to comply with regulations on emission reductions can be a deterrent for many SMEs to immediately go green. Fortunately, financing schemes such as the Enterprise Financing Scheme – Green (EFS-Green) have been readily implemented by Singapore’s government to help local companies develop capabilities and capture growth opportunities.

A severe knowledge gap exists as well, with 28% of businesses unable to identify and adopt the right green tools, and 26% lacking the specialised expertise to manage them. Business owners are not necessarily well-informed in navigating the complex environmental regulations, which leads to many businesses putting sustainable adoption at the back burner.

Sustainability is not just environmental, it’s social too

This is why an ecosystem approach is best. Singapore’s government, financial institutions and larger corporations are establishing grants, partnerships, workshops and programs to help SMEs navigate this wave together. 

The same thing applies when integrating sustainability efforts into the business. It shouldn’t focus on solely reducing carbon footprint, or reducing emissions. In reality, there’s a social aspect to it, like creating workplaces and supply chains that are ethical, eliminating any exploitation of workers, progressive wages and bringing meaningful impact to local communities.

Singapore’s SMEs are taking strides to adopt more social sustainability. The Singapore Business Federation reported that 8 in 10 SMEs understand the value of social sustainability, with around 95% of businesses implementing at least one social sustainability initiative in the past year. However, to replicate this across Southeast Asia, the challenge that SMEs across the region face is rallying resources that can guide them in navigating the tools to strengthen their social sustainability efforts. Once it’s unlocked though, it becomes a competitive advantage and sustainable for the long-run.

Building conscious SMEs for the future

Looking ahead, sustainability for SMEs will become more integrated as the world moves towards protecting the environment and its people. We’re now moving towards an era where businesses must be increasingly transparent and accountable, the rise of the circular economy, and a global market integrating the United Nations’ Sustainable Development Goals. 

So, what can our neighbourhood SMEs learn from this? In essence, start from the people. Your team and community are your greatest assets. Tap into the ecosystem, and be willing to collaborate with fellow industry leaders, financial institutions and government schemes that believe in the impact of sustainable business. Always remember, you don’t have to figure it all out alone and at once!

Sustainability in the business strategy is both profitable and principled. Singapore’s efforts to introduce a green economy is serving as a case study for Southeast Asia to learn about building conscious SMEs from the ground up. By blending digital innovation with a social conscience, soon we may be able to see SMEs adapting more green practices across the region.