What do the Paris Agreement in 2015, the United Nations Sustainable Development Goals (SDGs), and Singapore Green Plan 2030 have in common? They provide big-picture direction and deep insights for companies to better understand environmental, social, governance (ESG) and sustainability. This in turn allows companies to engage their shareholders and build their businesses on the principles of ESG and sustainability.
By engaging their stakeholders throughout the value chain e.g., customers, communities, investors, employees, suppliers, government, and regulators, SMEs can add value to their business through the following:
1. Build customer loyalty through sustainability initiatives like using bio-degradable materials
2. Attract and motivate employees who value ESG and sustainability
3. Increase brand value through sustainability
4. Lower operating costs, for example, by simplified packaging, leveraging the 3 Rs (reduce, reuse, recycle) when using office supplies, or adopting the use of energy-efficient equipment
These humble benefits, though small at first, can help dispel basic myths so that building towards sustainable growth can gain support and traction over time. Some examples of myths surrounding ESG and sustainability are:
1. Considerable resources are needed to embark on such initiatives
2. ESG and financial performance are mutually exclusive
3. ESG is nothing but a public relations strategy
4. ESG has no impact for SMEs
To embark on their journey towards sustainability, the following Government Assistance Schemes are available to SMEs: 1) Enterprise Development Grant (EDG) and 2) Energy Efficiency Grant (EEG).
Enterprise Development Grant (EDG)
Under EDG, Enterprise Singapore has included a sustainability component in business strategy development which includes: 1) Environmental, Social, and Governance Reporting Framework Development, 2) Sustainability Risk Assessment, 3) Material Footprinting, 4) Sustainability Strategy Development, and 5) Sustainability Value Creation.
Learn more about EDG.
Energy Efficiency Grant (EEG)
EEG will provide up to 70% support for SMEs to adopt pre-approved energy-efficient equipment in 6 categories, including LED lighting, air-conditioners, refrigerators, etc. Grant support is capped at S$30,000 per company per year and the application process will only be available for 6 months starting from 1 Sep to 31 Mar 2023.
Learn more about EEG.
In conclusion, sustainability can create value for businesses with benefits that outweigh the costs, and SMEs should create business strategies with this in mind. With Government Assistance Schemes available, SMEs are further supported to play their part in the urgent worldwide call for sustainable development.
Contributed by: Bhanu Pratap Rai (SME Centre@SMF Senior Business Advisor)
