Singapore-based companies face unique challenges when it comes to implementing Environmental, Social and Governance (ESG) initiatives.
One of these challenges is its densely-populated setting – limited land and resources make it difficult to implement large-scale sustainable development projects.
Amid inflation and rising costs in Singapore, getting stakeholders on board ESG plans is often met with resistance due to the upfront investments that ESG initiatives may bring about.
Lastly, too many stakeholders may have conflicting views on ESG issues. As a result, companies must tread carefully when implementing ESG initiatives, ensuring that they take into account the needs of all stakeholders.
These sentiments resonate with the findings of a DBS-Bloomberg media survey of 800 small-and-medium enterprises across Singapore, Hong Kong, India, Indonesia, mainland China and Taiwan.
The survey found that Singapore prioritises ESG the most, with eight in 10 of the Singapore-based participants rating ESG as a high priority for their business.
But some challenges remain for Singapore companies, in the form of balancing environmental, social, and governance (ESG) goals with growth targets for their business (63 percent), followed by cost pressures when deploying ESG investments (61 percent), as well as a lack of access to technical know-how and ESG specialists (60 percent).
The report cited Joyce Tee, group head of SME banking at DBS, who highlighted that the non-standardisation of ESG requirements are blocking ESG transitions.
“Unclear reporting and emissions measurement requirements often hinder SMEs’ ESG journeys,” she said.
“The lack of homogenous frameworks and standardised guidelines lead to wide discrepancies within and across industries, and markets, when measuring success and performance,” she adds.
How unions can support the rollout of ESG practices rollouts
The rest of Singapore’s business community feels the same way.
On 12 September, NTUC held an evening focus group discussion at Sprout Hub to hear out companies’ concerns about ESG issues and the green economy.
The event was part of NTUC’s #EveryWorkerMatters Conversations. The discussion involved over 70 participants, comprising business leaders, workers, union representatives, economic researchers and government agencies.
A poll held at the event revealed that while Singapore companies want to go green, 28 per cent of attendees were unsure about what the green transition entailed, while 11 per cent were not confident that they could pull it off.
Implementing ESG initiatives can be challenging, especially for smaller companies. With limited resources, it can be difficult to devote personnel to research the costs and benefits associated with sustainability and ensure that they are compliant with new regulations or laws.
During the discussion, SME owner Wei-Shan Chua shared that she is limited by her small workforce, even if she was fully onboard with adopting a sustainable business model.
“The challenge we face is to make time for employees to go for training, because we don’t have as much redundancy as bigger companies, and we must organise and plan for it before it can happen,” said Ms Chua at the event.
“It is a tricky balance, but it is a necessary step, and we recognise it, and I think most companies are prepared to adopt it, especially mine,” she adds.
Mr Ng Chee Meng, NTUC’s secretary-general, said NTUC aims to support enterprises in their ESG initiatives.
“We want to aid workers and companies to transit as seamlessly as possible to the green economy, achieve inclusive growth, create quality jobs for all, and manage the corresponding challenges collectively,” said Mr Ng at the discussion.
Editing is my work.