DBS: More than six in 10 SMEs in Singapore find it challenging to transition to more sustainable models while balancing business growth

Singapore.25 Oct 2022

More than 80% of SME leaders in Singapore state that ESG is a high priority for their business

Singapore, 25 Oct 2022 - While the unrelenting cry for businesses to adopt more sustainable practices continues to ring out, SMEs in Singapore have revealed that their top challenge transitioning to more sustainable business models is balancing ESG goals with growth targets for their business (63%). This was followed by cost pressures when deploying ESG investments (61%) and a lack of access to technical know-how and ESG specialists (60%).

An inaugural survey of 800 SMEs across six markets[1] in Asia conducted by DBS and Bloomberg Media Studios in August, found that SMEs in Singapore led their regional counterparts with more than eight in 10 of them rating ESG a high priority for their business. They also reflected that climate change leading to a depletion in natural resources (85%) was the top issue they wanted to address in the coming year. This was followed by waste reduction (63%) and employee health and safety / work-life balance (56%).

Joyce Tee, Group Head, SME Banking, DBS said that through the hundreds of interviews done with Bloomberg, one thing was clear: SMEs acknowledge the need for more sustainable business models but are struggling to put their transition plans in place. This is because the post-pandemic economic environment has meant that business growth and survival is top of mind.

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

Tee added, “Unclear reporting and emissions measurement requirements often hinder SMEs’ ESG journeys. The lack of homogenous frameworks and standardised guidelines leads to wide discrepancies within and across industries, and markets, when measuring success and performance.

“We understand that SMEs face many challenges especially when transitioning to more sustainable business models. It is imperative that SMEs successfully make the transition. At DBS, we stand ready to support SMEs in their decarbonisation efforts through financing and advisory services by helping them to plug into the right ecosystems across Asia.”

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.

To help and partner customers on their net zero journeys, all Relationship Managers (RMs) at DBS’ Institutional Banking Business Group, including SME Relationship Managers are being trained to engage customers on their sustainability transition journeys. RMs are upskilled to integrate climate metrics into their customers’ portfolios and pave the way for future integration into credit assessment models. In addition, they are also being trained to:

  1. Identify financing opportunities to partner their clients on their net zero journeys;
  2. Shift customers’ portfolios to align with climate goals; and
  3. Identify risk management principles when advising customers on their transition journeys.

In September this year, DBS laid the foundations of how it would strategically direct its financing towards lower-carbon activities. It was the first bank in Southeast Asia to announce a landmark set of decarbonisation commitments, with interim targets set for 2030. The commitments represent one of the most comprehensive sets of decarbonisation targets in the global banking industry and reinforce DBS’ commitment to net zero financed emissions by 2050.

[1] Singapore, Hong Kong, India, Indonesia, Mainland China, Taiwan


About DBS
DBS is a leading financial services group in Asia with a presence in 18 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's "AA-" and "Aa1" credit ratings are among the highest in the world.

Recognised for its global leadership, DBS has been named “World’s Best Bank” by Global Finance, “World’s Best Bank” by Euromoney and “Global Bank of the Year” by The Banker. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney and the world’s “Most Innovative in Digital Banking” by The Banker. In addition, DBS has been accorded the “Safest Bank in Asia“ award by Global Finance for 14 consecutive years from 2009 to 2022.

DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets. DBS is committed to building lasting relationships with customers, as it banks the Asian way. Through the DBS Foundation, the bank creates impact beyond banking by supporting social enterprises: businesses with a double bottom-line of profit and social and/or environmental impact. DBS Foundation also gives back to society in various ways, including equipping communities with future-ready skills and building food resilience.

With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. For more information, please visit www.dbs.com.