83% of Asian SMEs Say ESG Is a High Priority, but Only 37% Have Roadmap
Mint (03/28/23) Whye, Lee Kah
A recent report by Bloomberg Media Studios, in partnership with southeast Asian bank DBS (DBSDY), estimated that 85% of medium-sized and 75% of small companies cited environmental, social, and corporate governance (ESG) as a high priority, but only 37% have a clear roadmap on how to reach their targets. The report included the findings of an August 2022 survey involving 800 SMEs (small and medium-sized enterprises) across six markets in Asia—Indonesia, Singapore, Taiwan, Hong Kong, India, and China. The study involved more than 937 decision-makers in such sectors as agriculture, power, mobility, F&B/hospitality, and real estate. The report suggested that overall, business leaders were optimistic about sustainability, with more that eight in 10 concurring that their company's operations should focus on safeguarding the environment and they should include sustainability values when choosing investment projects. On average, Asian companies that regarded ESG as a high priority set aside 18% of their budget for ESG initiatives, potentially rising to 19.8% within the next three years. The bulk of those initiatives were geared toward environmental projects. Decision makers cited such key focus areas as waste management, climate change, and carbon footprint, according to the study. SMEs also cited compliance with regulations, attracting talent, boosting revenue, pleasing stakeholders, and doing the right thing as leading motivators to embrace ESG, the survey found. Respondents cited such barriers to ESG adoption as unclear reporting standards and financial concerns. More than one-third of SMEs mentioned such challenges as return on investment, cost of deployment, and meeting growth targets. Inadequate clarity on ESG standards also was cited as an obstacle. The report indicated that most SMEs are serious about ESG and intend to make it a core part of their business, but many are in the early stages. Most SMEs prioritized initiatives that might strengthen their bottom line and those that can be immediately implemented.
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