The top challenge for small and medium-sized enterprises (SMEs) in Singapore transitioning to more sustainable business models is balancing environmental, social and governance (ESG) goals with growth targets for their business (63%), followed by cost pressures when deploying ESG investments (61%) and a lack of access to technical know-how and ESG specialists (60%), according to a recent survey.

Singapore SMEs led their regional counterparts with more than eight in 10 of them rating ESG a high priority for their business, points out the survey of 800 SMEs across six Asian markets – Singapore, Hong Kong, India, Indonesia, mainland China and Taiwan – conducted by DBS and Bloomberg Media Studios.

The survey also reveals that climate change leading to a depletion in natural resources (85%) is the top issue they want to address in the coming year, followed by waste reduction (63%) and employee health and safety/work-life balance (56%).

SMEs trying to transition to more sustainable business models are also finding that there is a lack of standardized measurement in reporting standards (75%), technical know-how in the market on how to implement ESG frameworks and solutions (70%), and funding (48%).

SMEs in Singapore are ready to transition as close to eight in 10 acknowledged that more sustainable business models benchmarked against international standards would increase their competitive edge by enabling them to attract more business from larger companies.

“Unclear reporting and emissions measurement requirements often hinder SMEs’ ESG journeys,” points out Joyce Tee, group head, SME banking, DBS. “The lack of homogenous frameworks and standardized guidelines leads to wide discrepancies within and across industries, and markets, when measuring success and performance.”