Singapore SMEs see little need for climate disclosure help, as few big clients ask for such reports

LARGE manufacturers are not pushing their Singapore suppliers to report carbon emissions, making it less urgent for these smaller businesses to acquire such capabilities, some small and medium-sized enterprises (SMEs) told The Business Times.

This is even as the Singapore Manufacturing Federation (SMF) launched a new service last week, through which companies can temporarily hire an external consultant to advise them on reducing emissions.

The Chief Sustainability Officer-as-a-Service programme aims to help local manufacturers support their clients in climate disclosures.

From 2025, listed companies in Singapore will have to report their carbon footprint, including emissions from parties along their supply chain. Large non-listed companies will have to do so from 2027.

‘No urgency’, lack of resources

Of the seven manufacturing SMEs to which BT spoke, none had chief sustainability officers (CSOs); only one had dedicated personnel overseeing sustainability issues.

SMF’s Chief Sustainability Officer-as-a-Service programme aims to fill this expertise gap. For S$10,000 to S$30,000, manufacturing SMEs can get help from sustainability consultants, who will assess their operations and co-develop decarbonisation roadmaps.

After the roadmaps are implemented, these consultants will help the companies submit emissions data to the government.

From assessment to the implementation of solutions, the consultants may put in about 10 man-days of work over three to six months, said SMF’s chief sustainability officer Clement Teo.

But some SMEs see “no urgency” to tap this programme, though it is something they might consider in the future. Most said that their clients – many of which are multinational corporations – have not asked them to report their carbon emissions.

Lawrence Lim, general manager of engineering company EIOS 99, said: “For many SMEs, this isn’t something clear and present yet, so I suspect there’ll be inertia (to sign up).

“What’s clear and present are more bread-and-butter issues – how to contain costs, how to grow revenue. If it’s not hitting us yet, we wouldn’t devote resources to this.”

Medical-device contract manufacturer AP Technologies has not faced substantial pressure from its end-customers to reduce its carbon footprint, said the company’s chief executive Charles Tang, who noted that the medical device industry has been slower to kick off its sustainability efforts.

“That being said, there’s been a push for ESG (environmental, social and governance) in today’s business environment,” he said, adding that the firm could use help in improving the efficiency of its processes.

Adeline Wong, general manager of magnetic product manufacturer Superworld Electronics, said: “It’s not an immediate need for us; right now, we have other priorities.” The company might consider getting on board the programme in 2025, she added.

Yet, even with this programme, SMEs will face manpower constraints as the assigned consultant will need support from an existing employee.

Said Wong: “We’d probably need a backend team to support and furnish information (to the CSO) to execute things.”

Added EIOS 99’s Lim: “SMEs will need to restructure themselves, or invest in headcount to do this properly.”

Sherman Ng, sales manager at steel supplier MaxSteel, questioned whether appointed consultants would be able to know his company’s business enough – especially in just 10 days – to provide insights and actionable solutions.

“Some of our new staff are unable to understand our business even after a month,” he said. “Ten days might be a little short to understand our processes and improve sustainability within the company.”

Still some interest

But some SMEs did see value in the programme.

Moh Yan Ting, director of wet-wipes manufacturer Freshening Industries, said: “It’s very useful, because when it comes to the bigger picture like carbon emissions and net-zero, we’re quite lost as SMEs.”

She is keen on getting into the programme, especially as the company plans to incorporate energy-efficient features and systems in its new factory.

“So if I find the consultant good, it might encourage us to hire a permanent CSO. It’s a very important role right now,” she said.

Robotics and automation firm PBA Robotics already has a dedicated team to handle sustainability issues, but its chief executive Derrick Yap said that SMF’s programme could still help the company.

At least 10 of PBA Robotics’ customers, mostly large MNCs, have asked it to declare its carbon footprint.

Professor Mak Yuen Teen of the National University of Singapore Business School said that while the programme may help SMEs meet compliance requirements, calling it a CSO service might be “overselling” it. This is especially if the consultant is mostly providing advice on reducing emissions and generating sustainability reports.

“It would be less useful for those who truly want to integrate sustainability into their business or are looking to capitalise on opportunities,” he said.

“Because that would require good knowledge about the business and deeper involvement, and is not something you can achieve by getting someone spending a few hours a week for a certain period, or who comes in at the end of the year.”