3 in 4 SMEs not ready to go green due to tighter operating margins, lack of expertise: Report

SINGAPORE – Three in four small and medium-sized enterprises (SMEs) in Singapore are struggling to kick-start their sustainability efforts, noted a new study.

They are hindered by cost pressures and limited technical expertise, as well as a lack of time, according to sustainability reporting and data platform Gprnt and consulting firm PwC, which polled 560 SMEs across 19 sectors, including manufacturing and logistics.

The 2025 SME Sustainability Barometer found that SMEs here see sustainability efforts as difficult to justify amid tight operating margins and more pressing business needs, with 80 per cent of those surveyed citing a lack of tangible returns on their sustainability efforts.

SMEs in the Republic also lack the technical know-how to translate sustainability goals into concrete action plans. Limited time and resources, compounded by rising economic pressures from geopolitical tensions, have also constrained their ability to make progress.

The study also noted that more than 70 per cent of SMEs here have not accessed any form of government assistance or support, despite the availability of various schemes.

This points to persistent challenges in awareness, accessibility and the perceived relevance of such programmes, and therefore stronger public-private collaboration is needed to help SMEs start and stay engaged in their sustainability efforts, said the study.

It recommended a set of actions to help SMEs strengthen their sustainability capabilities. The study also urged greater efforts to help firms recognise the business value of sustainability by showcasing measurable benefits and success stories.

“A central case bank that consolidates success stories, supported by data and benchmarks to quantify the benefits, could spur more SMEs to follow suit,” it said.

SMEs should also be guided with clearer first steps, such as appointing a staff member to lead sustainability efforts and adopting simple, practical road maps to achieve early wins.

The study also called for scaling up flagship “Queen Bee” programmes, in which large corporates work with smaller partners across their supply chains to build green capabilities.

Costs associated with sustainability goals could also be managed by developing shared solutions across sectors to achieve economies of scale.

SMEs should also be recognised for their sustainability progress and be able to convert this into business and financing advantages.

“A unified sustainability ‘passport’ can simplify this process, by helping SMEs navigate fragmented certification landscapes and showcase their progress in a clear, credible way,” noted the study.

Gprnt chief executive Lionel Wong said SMEs play a key role in “greening” the wider business ecosystem, as their sustainability efforts can have an effect on the networks around them, including buyers, suppliers, customers and financiers.

“They green the value chains they power, and in doing so, generate high-quality data from the ground up,” he said.

Mr Ravi Menon, Singapore’s Ambassador for Climate Action, said SMEs must view sustainability not as a cost to bear, but as a business strategy to secure their place in a “carbon-constrained economy”.

“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’s about staying relevant and resilient,” he said.

SMEs can find more information on the study and its recommendations here.