Green goals or business growth? Majority of SMEs find it hard to balance both

It is businesses’ top obstacle to shift to sustainable business models.

With the ongoing transition to greener goals, most small and medium-sized enterprises (SMEs) said their top challenge in pushing for sustainable business models is striking a balance between ESG goals and growth targets.

A DBS study showed that majority or 61% of SMEs decried inflation as a challenge when investing in ESG whilst 61% said they lack access to technicalities in green goals and ESG experts.

Despite the headwinds, more than 80% of SME leaders still said that ESG is a high priority for their businesses.

More than eight in 10 businesses said the top concern that they wanted to address was the climate crisis leading to a depletion in natural resources. Following this goal is waste reduction, with 63% saying it is their top plan, and employee health and safety as well as work-life balance, with 56%.

Reflecting on these findings, Joyce Tee, DBS group head for SME banking, said businesses are aware of pushing more sustainable business models but are facing difficulties as they are prioritising business survival amidst the post-pandemic economic environment.

The DBS and Bloomberg Media Studios survey conducted in August polled 800 SMEs across six markets in Asia, including Singapore.