With a nominal GDP of US$362.8 billion and the 7th highest GDP per capita rank in the world, Singapore has shown itself to be a melting pot of ideas and innovation. The government is aware of this fact and has allocated S$3.8 billion for SMEs to grow in 2020. Now, this budget decided to help SMEs develop in many fields; business development, manufacturing, accelerating their growth, and marketing, to name a few. However, a portion of this funding is precisely to make SMEs more sustainable and environmentally friendly – in terms of their functioning and growth.
Whether it be energy efficiency or waste management, SMEs in Singapore need to become sustainable in multiple different fields to become truly green. With that view in mind, the Singaporean government has created grants which aim to diverse areas to make sustainability an easy and accessible practice. Read on below to find out how your SME can become sustainable, with no additional costs to you!
Becoming energy efficient is one of the most effective ways for SMEs to practice sustainability, mainly when it comes to cutting down carbon emissions to reduce the impact of global warming. Singapore has already taken the first step by replacing fossil fuels with natural gas as a means to provide the country’s electricity. Today, 80% of the energy generated in Singapore comes from natural gas, compared to only 19% in 2000. Not only is the energy sector directly targeted, Singapore also incorporates their aim to become energy efficient in their infrastructure. By making use of low carbon emission and natural energy sources, Green infrastructure is a rapidly growing field with great potential – the Green Mark Incentive Scheme provides up to S$115 million through a combination of different schemes, including the Pilot Building Retrofit Energy Efficiency Financing (BREEF) program. This program allows non-residential properties to get a loan to finance to install new and energy-efficient technology, ranging from LED light bulbs to energy-saving air conditioners. If you are planning to start a new venture, and haven’t found office space, one of these schemes might be the perfect way to begin your journey.
Of course, not all SMEs can become 100% energy efficient overnight. Instead, energy management starts at a small scale – maintaining electrical devices like refrigerators, air conditioners, and microwaves is the least companies can do to reduce costs and power consumption. Molex Singapore, for example, an electronics manufacturer, saved S$1.2 million annually by making themselves more energy-efficient – they used a system that regulated energy according to demand. Another way to become energy efficient is to invest in green technology. ES Power supplies carbon-neutral electricity and 10-25% less costly.
But, of course, energy-efficient technology won’t pay for itself. Thus, the government has created various funds for SMEs to use, two of which are mentioned here.
Energy Efficiency Fund – E2F
The Energy Efficiency Fund got set in motion by the National Environment Agency (NEA) of Singapore. SMEs which operate industrial facilities are especially eligible for this fund. It helps in designing efficient resource technology, improving the type of equipment used in manufacturing, assessing the current facilities are getting used, and making energy management information systems more relevant. Up to S$600,000 is provided by the grant, and it hosts a variety of workshops to create and implement such practices. International Rectifier Pte Ltd (IR) used this grant in 2014 and remodeled its water transport system. Their use of new piping and adjustment of motors has created a system that has the potential to increase energy savings by 40%. If you’re an SME looking to expand into industrial manufacturing, this grant could be what you need!
Energy Efficiency Financing Programme
The Singapore Economic Development Board (EDB) started this program to provide upfront capital to install new equipment to increase energy efficiency in SMEs. As a pilot program, it is still in the starting stages of providing funding and has chosen Sustainable Development Capital (Asia) Limited (SDCL) to act as an intermediary. A third-party investor will be responsible for giving money to a company of their choice. The capital is company-specific and will help with equipment, labor, installation, measurement costs, and annual operating costs. The program has many benefits, including better performance of equipment, reduced carbon emissions, flexible payment schedules, and risk transfer. If you happen to be an SME with industrial facilities and are looking to install new equipment, look no further.
Finance & Transport
Sustainable Finance is becoming very important to SMEs. It gets used as a tool to provide transparency in financial dealings. It has increased demand from investors and facilitates interaction between finance and sustainability. More importantly, sustainable finance gives SMEs a competitive edge, and are found to be 21% more successful than non-sustainable competitors. It could argue that SMEs are actually key players in sustainable finance – they pave the way for major social and economic development as they are the building blocks to the future economy.
Similary, Sustainable Transport contains a whole world of opportunities for SMEs – the development of environmentally friendly vehicles is in high demand, which can employ hundreds of people in designing and testing. The benefits to the environment are apparent; lesser emissions in the atmosphere will improve public health and fight climate change. The improved health of employees from smaller particles in the air can improve productivity and lead to an overall long-term sustainable lifestyle.
Sustainable Bond Grant Scheme
Initiated by MAS, the Sustainable Bond Grant Scheme helps issue bonds that aid in green finance for corporate social responsibility (CSR) practices, and to provide better long-term pricing. Any company based in Singapore can apply and reapply for this scheme, and it is valid till 31 May 2023. The minimum bond size is S$200 million, with a cap of S$100,000, and requires a one-year commitment. Any expenses based on sustainability or social responsibility fall under this bond.
Sustainable finance is becoming very important to SMEs. It gets used as a tool to provide transparency in financial dealings. It has shown to increase demand from investors and facilitates interaction between finance and sustainability. For SMEs looking to invest in green finance bonds, this scheme is perfect for you.
Vehicle Emission Scheme – VES
Started by OneMotoring, as part of a government agency scheme, the VES aims at helping citizens buy cleaner vehicles, including electric cars. With the VES, customers who purchase new and environmentally green vehicles are eligible to apply for rebates as well as avoid emissions surcharges. These surcharges can lead up to S$20,000 in fines. SMEs working in fields of transportation would particularly benefit from this scheme. With recent ban on e-scooter, food delivery companies got hugely impacted. However, LTA offered $1000 to switch to electric bicycles. SMEs that rely on logistical work that lend vehicles to its customers or other companies, this scheme would be great for SMEs that are also willing to provide their employees with cars as it shows their interest in making the world sustainable beyond the office.
Waste management is another accessible way for SMEs to integrate sustainable practices into their daily lives. Singapore produces 9,000 tonnes of solid waste in a day – management of such large quantities is of utmost importance to those interested in sustainable living. Recycling can substantially reduce the cost of manufacturing new items, which can be an essential avenue for SMEs to consider. It can facilitate the collaboration of different companies and the government, which will always lead to the development of new and innovative ideas and sustainably build on the economy.
Also launched by the NEA, the 3R Fund provides incentives for SMEs to dispose of their solid waste at certified NEA incineration plants. Additionally, SMEs with unique practices in recycling, disposal, or new equipment can apply for the fund – they can receive up to 80% or S$1 million worth of funding corresponding to their innovation and the amount of waste recycled, with the grant covering workforce, equipment, and consulting, for a period of 3.5 years. Waste management is another accessible way for SMEs to integrate sustainable practices into their daily lives. Singapore produces 9000 tonnes of solid waste in a day – management of such large quantities is of utmost importance to those interested in sustainable living. With the 3R fund, SMEs looking to revolutionize waste management, or even practice such activities at a small scale, have a great shot.
Closing the Waste Loop Initiative
The NEA and Environmental Services Industry Transformation Map collaborated to offer grants to those willing to develop new techniques in waste management. SMEs and education institutes are given the opportunity to work together and develop new technology through the R&D grant provided by this initiative. The topics can span a variety of waste management problems, including water, landfill, and dumping grounds. Different projects for plastic recycling and ash incineration have been funded since 2018. In 2020, the government’s Ministry of Environment and Food Resources also donated S$45 million to the Initiative, to provide SMEs with more incentive to participate in sustainable waste management.
Recovering from the Virus
Sustainability is an umbrella term for many kinds of practices. One of them is maintaining public health and safety while building your SME. In light of recent events following the spread of the Covid-19, six of Singapore’s most prominent families have created the Helping Our Promising Enterprises (HOPE) fund, which promises companies S$50,000 in loans to recover from the outbreak. Applications open on 26th February, so make sure to check them out.
The Singaporean government is willing to invest large amounts of money and time into making its SMEs sustainable as it is the only profitable way of moving forward. SMEs have a bright future in making their practices sustainable by improving their existing technology or devise innovative ideas to solve problems that have been around for many decades. The time to bring about lasting change is now when Singapore is still developing its infrastructure and business models. So if you’re an SME looking to take advantage of the tidal wave of income being invested in sustainability, make sure to keep an eye out for more exciting grants coming your way, and cash-in as soon as you can.