Singapore SMEs Struggle with Carbon Reporting, But Technology Offers Way Forward

Carbon reporting, once seen as an administrative burden, is increasingly becoming a licence to operate. For Singapore’s SMEs, the path to net-zero will be neither easy nor optional — but with the right digital tools, it can become a path to resilience and growth.

SINGAPORE, September 11, 2025 — Small and medium-sized enterprises (SMEs), which make up 99% of Singapore’s businesses and contribute 44% of national greenhouse gas (GHG) emissions, remain underprepared for the carbon reporting mandates taking effect from 2025. But a wave of digital innovation is offering these companies a critical lifeline, turning a compliance challenge into an opportunity for growth, resilience, and competitiveness.

The findings are drawn from the Singapore Business Carbon Report 2024, released by the UN Global Compact Network Singapore (UNGCNS). The annual report captures the progress of businesses in measuring and reducing their emissions under the LowCarbonSG programme, while highlighting the barriers that continue to hold back SMEs.

SMEs: The Weakest Link in Net-Zero Ambitions

While large enterprises account for more than 95% of Singapore’s Scope 1 and 2 emissions, they are also more advanced in carbon reporting. SMEs, by contrast, are trailing behind despite their significant national footprint.

According to the report:

Only 14% of SMEs have set emissions reduction targets.

60% cite a lack of in-house expertise to manage carbon reporting.

Nearly half remain unaware of available tools like the Carbon Emissions Recording Tool (CERT).

67% say they face difficulties accessing green financing, even though schemes such as the Energy Efficiency Fund remain underutilised.

This has led to what UNGCNS calls a “reactive adoption” mindset, with many SMEs viewing sustainability merely as a regulatory requirement rather than a strategic enabler.

Yet, there are encouraging signs. About 50% of SMEs that began decarbonisation reported tangible benefits, including cost savings, stronger customer loyalty, and improved resilience. For some, carbon reporting has even helped unlock certifications such as Eco-Office status or provided insights that led to operational efficiencies, like reducing refrigerant leaks or adopting electric vehicles.

Technology as the Great Enabler

The report underscores that digital solutions are proving vital in helping SMEs close the gap. Platforms such as ESGpedia, developed in partnership with UNGCNS, now power the digital version of CERT. By integrating the Singapore Emission Factors Registry, ESGpedia ensures emissions data is contextualised for Singapore businesses, addressing one of SMEs’ biggest hurdles — lack of localised, reliable data.

Meanwhile, A*STAR’s AdViSE platform provides companies with life cycle assessment tools to evaluate emissions, costs, and resource use simultaneously. Its Resource Efficiency Monitoring and Analytics Platform (REMAP) has helped firms achieve up to 20% energy savings, demonstrating how sustainability can drive operational efficiencies as well as compliance.

Professor Lawrence Loh of NUS Business School stressed the importance of pairing digital innovation with integrity: “Companies want to be transparent. The challenge is measurement. Technology must be paired with trust.”

Case Studies: From Compliance to Innovation

Several Singapore companies featured in the report illustrate how technology can transform carbon reporting into a catalyst for change:

FairPrice Group digitised its data collection using robotic process automation and AI-powered OCR, enabling faster, more accurate reporting. These systems also supported pilots for autonomous EVs in logistics and cooling tower retrofits, cutting costs and emissions simultaneously.

SATS Ltd, operating across 217 global sites, used digital platforms to harmonise data collection and improve Scope 3 emissions management, embedding sustainability into its organisational culture.

Matex International built a structured carbon accounting framework and leveraged it to develop new low-emission products like eco-friendly dyes and probiotic cleaners, turning reporting into innovation.

Constellar, operator of Singapore EXPO, installed real-time sub-metering across its venues to track energy consumption continuously, enabling smarter decision-making and strengthening its position as Asia’s most sustainable MICE venue.

These examples demonstrate that technology is not just a reporting tool, but a lever for new products, services, and business models.

Looking Ahead: Closing the SME Gap

With Scope 1 and 2 emissions reporting mandatory for listed companies from FY2025, and Scope 3 disclosures set to follow for larger firms from 2026, SMEs will face growing indirect pressure as part of corporate supply chains.

UNGCNS President Dr Bicky Bhangu noted: “SMEs are the backbone of our economy. Supporting them with the right tools and training is critical if Singapore is to achieve its 2050 net-zero goal.”

The report calls for:

Simplified frameworks tailored to smaller companies.

Sector-specific guidance to make reporting more practical.

Better access to financing, linking credible reporting with eligibility for green loans and grants.

The message is clear: while SMEs face structural challenges, digital technology provides a powerful bridge. Companies that invest early in reporting systems and data integrity will not only meet compliance but also secure long-term advantages in tenders, financing, and customer trust.