SINGAPORE, October 5, 2024 – Bain & Company and the Singapore Business Federation (SBF) have launched the SME Sectoral Net Zero Transition Programme, a groundbreaking initiative aimed at helping small- and medium-sized enterprises (SMEs) in Singapore accelerate their decarbonisation efforts. This programme, designed to address the specific challenges faced by SMEs, provides cost-effective, scalable, and action-driven solutions that leverage generative AI and Bain’s decarbonisation expertise.
The pilot programme, which concluded recently, saw 21 food manufacturers—ranging from beverage producers to noodle makers—successfully complete the initiative. These companies have committed to achieving a 50% reduction in their Scope 1 and 2 emissions by 2030. The programme aims to scale up and include more SMEs from other sectors to support Singapore’s national net-zero ambitions.
“SMEs are the backbone of Singapore’s economy, but they are also significant contributors to greenhouse gas emissions. The decarbonisation pathway for SMEs is fraught with challenges, from financial constraints and limited capability to the complexity of integrating sustainable practices,” said Gerry Mattios, co-director of Bain & Company’s Global Sustainability Innovation Center. “Yet within these challenges lie immense opportunities, and our pilot shows sustainability and profitability can go hand in hand.”
The SME Sectoral Net Zero Transition Programme equips companies with four key components: sector-specific workshops, the AI-powered DecarboniSME tool for emissions analysis and strategy development, access to a network of funding and green solution providers, and ongoing advisory support from decarbonisation experts.
The AI tool, DecarboniSME, is designed to dramatically accelerate the decarbonisation process, allowing companies to establish emissions baselines and create comprehensive sustainability strategies 75% faster than traditional methods. Additionally, it includes a chatbot to address decarbonisation-related queries in real time.
SBF Chief Executive Officer Kok Ping Soon highlighted the programme’s critical role in Singapore’s broader net-zero goals, noting that SMEs contribute over 40% of the country’s greenhouse gas emissions. Despite this, only a third of these businesses have made significant progress in reducing their carbon footprint, compared to 80% of larger enterprises. “The programme will provide companies with a comprehensive suite of resources, ensuring they are well-equipped to navigate regulatory changes and future-proof their operations,” Kok said.
The joint study that underpins the programme, Overcoming Barriers to Singapore SME Decarbonisation, surveyed nearly 500 SMEs from more than 20 sectors. It found that while half of the SMEs already engaged in decarbonisation have seen tangible benefits—such as enhanced customer loyalty and cost savings—major hurdles remain. These include a lack of awareness of decarbonisation solutions, insufficient in-house capability, and limited financial support.
Some 46% of SMEs surveyed indicated they were unaware of the range of decarbonisation solutions available, while 60% reported lacking the internal capabilities to implement them. A further 67% highlighted the need for better financing options to support their green initiatives.
One of the SMEs in the pilot programme, People Bee Hoon Factory, reported a 30% reduction in electricity costs through the installation of solar panels. The company also optimised its washing processes and used thinner packaging materials, halving its water consumption and preparing the business to comply with future global regulations.
“The tailored approach provided us with a deep understanding of emission reduction and long-term decarbonisation planning,” said Jamie Koh, founder of Brass Lion Distillery, a participant in the programme.
HSBC Singapore, which is supporting the programme’s expansion phase, echoed the importance of providing SMEs with both knowledge and financing solutions. Priya Kini, Head of Commercial Banking at HSBC Singapore, said, “We look forward to deepening our support as the programme expands to new sectors, helping SMEs on their journey towards a more sustainable future.”
With the success of the pilot, Bain & Company and SBF are now working with trade associations, chambers, and Enterprise Singapore to broaden the programme to include more food manufacturers and other sectors, ensuring that Singapore’s SMEs are not left behind in the transition to a low-carbon economy.