Why executives struggle in adopting necessary green technologies

About 81% of the real estate sector indicated full preparedness.

Nearly two-thirds of Singapore’s executives have not fully measured or analyzed the greenhouse gas emissions (GHG) emissions within their supply chains, amidst a lack of appropriate technology.

Less than half (44%) indicating that their companies have all the necessary tools, technologies, and infrastructure to measure and analyse carbon footprints effectively, Schneider Electric’s survey revealed.

The survey, conducted in March, involved 500 senior business leaders in Singapore, spanning board members, C-suite executives, directors, and senior managers. They represented small, medium, and large multinational corporations (MNCs) across diverse industries.

It was also seen that significant gaps in the engagement of Singapore businesses with their supply chain partners to calculate total GHG.

There are variations in preparedness across sectors, roles, and seniority levels. For example, board members (58%) and C-suite executives (56%) are more likely to perceive their companies as having the required technology compared to senior managers. 

The real estate sector appears to be the most prepared, with 81% achieving full implementation, whilst engineering and education sectors lag behind (both at 13%).

Despite the measurement gap, Singapore businesses are taking steps to green their supply chains. Measures include switching transportation routes, placing increased requirements on suppliers, and switching suppliers. 

Small businesses have big problems too

SMEs face particular challenges in meeting these requirements, with 95% of respondents believing it's becoming harder for smaller companies to supply larger ones due to increasing environmental requirements.

Half of the respondents indicated this situation is already happening – a sentiment shared by 60% of small businesses compared with only 48% of large ones.

Sixty-two per cent (62%) of businesses, particularly small ones (78%), have lost business due to strict GHG compliance, compared to 52% of large companies affected. 

Additionally, 47% of all business leaders and 57% of small business leaders believe business costs will rise due to emission reduction requirements. To aid suppliers in emission reduction, 81% offer financial incentives, 74% provide expertise access, and 28% offer training.

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Businesses embrace increased support said in Budget 2024

Businesses in Singapore welcome the support announced by Deputy Prime Minister Lawrence Wong in Budget 2024 to boost sustainability goals and green supply chains. 

A staggering 92% of organisations view the enhanced Partnership for Capability Transformation (PACT) scheme positively, with 94% of eligible businesses intending to apply. 

Additionally, nine in 10 believe the expanded Enterprise Financing Scheme – Green (EFS-Green) will provide crucial support, with 97% planning to apply. 

This support is timely as 89% cite access to working capital as a major barrier to adopting green solutions. 

Furthermore, 91% react positively to the Energy Efficiency Grant, and 91% support the establishment of the $5b Future Energy Fund, anticipating it will accelerate Singapore's energy transition.

Outlook

There is optimism regarding the impact of government initiatives in supporting green supply chains and energy efficiency practices.

Businesses view initiatives such as the Energy Efficiency Grant and the Future Energy Fund positively and express intentions to apply for them.

Yoon Young Kim, Cluster President of Schneider Electric, Singapore and Brunei, emphasises the need for increased cooperation between public and private sector stakeholders.

“The gap in technology and infrastructure to sufficiently measure and manage supply chain emissions must be addressed as part of Singapore’s green journey. In particular, more data and training are required to ensure the impact of supply chain adjustments on small businesses can be better managed and wider economic consequences avoided.” Kim said in a press release.