Most Singapore SMEs yet to start their sustainability journey

A majority of Singapore's small and medium-sized enterprises (SMEs) are at a standstill in the green transition, with three in four yet to embark on their sustainability journey, a new study has found.

Despite forming the backbone of the economy, these firms are struggling to decarbonise due to constraints in money, skills, and time.

Those were some of the key findings of the inaugural 2025 SME sustainability barometer launched at this year’s Singapore Fintech Festival by sustainability data platform Gprnt and professional services firm PwC Singapore.

The study, which involved over 560 SMEs across 19 sectors, revealed that despite the availability of various government assistance schemes, over 70% of firms had not accessed any form of support, even as 52% reported funding constraints. Four in five SMEs also lacked clarity on returns from green investments, making it hard to justify the costs amid tight operating margins.

Additionally, about three in four SMEs reported not having the technical know-how to translate sustainability goals into concrete action plans. At the same time, over 40% of them had limited bandwidth to explore available sustainability programmes due to rising economic pressures.

On where Singapore’s SMEs stand in the sustainability ladder, 75% of them were deemed beginners, having either not started or been just introduced the concept of sustainability. A further 16% were considered engaged, meaning they have started initial actions such as training or tracking relevant metrics.

Progress slows further up the ladder, with just 7% actively implementing policies and taking steps to improve. A mere 2% have reached the leading stage, showing marked improvements in their sustainability journeys.

Lionel Wong, CEO of Gprnt, said the leading SMEs are not confined to sectors with strong sustainability mandates. Around half cited investor or supply-chain expectations as their main motivator, while others are driven by the desire to improve decision-making, particularly when optimising resources and managing their utility consumption.

Ravi Menon, Singapore's ambassador for climate action, called for efforts to help SMEs see sustainability not as a cost to bear, but as a business strategy for securing their place in the carbon-constrained economy of the future.

“Environmental sustainability will become an increasingly important driver of competitiveness and new growth, as climate change intensifies in the years and decades ahead,” Menon said. “Supply chains and customers have begun to prioritise companies that demonstrate credible climate action and will increasingly do so. Going green is not about compliance – it is about staying relevant and resilient.”

To address the sustainability challenges faced by SMEs, the organisations behind the study proposed creating a repository of success stories and data to prove the returns from sustainability initiatives; encouraging trade associations to help firms pool resources for common activities; and expanding the reach of “Queen Bee” programmes, where large enterprises guide SME suppliers in building green capabilities, among other recommendations.

Kok Ping Soon, CEO of the Singapore Business Federation, which supported the study, said: “In today's tough economic climate, sustainability can easily take a back seat. The SME sustainability barometer is a timely reminder on where SMEs stand and where support is most needed.”

Wong said Gprnt’s platform can help businesses automatically generate basic sustainability metrics at no cost, lowering the initial barrier. Through benchmark visualisations, SMEs can also see how they compare against their peers in their sustainability journey.

“That said, compiling robust benchmarks depends on having a sufficiently large pool of granular, disclosed data from industry, which is still limited today,” Wong noted.

“That’s why the barometer advocates for more SMEs to start generating their own baseline metrics using Gprnt’s free automated tool, and for stronger public–private collaboration to build the business case and show the business value for disclosure – helping SMEs unlock opportunities in market access and financing,” he added.