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– Emphasis on the benefits of more business gaining through the supply chain brought down from SGX listed company
down to companies that are pro sustainability that can win tender products

ESG stands for environmental, social, and governance. It is a framework for evaluating
how companies manage their environmental, social, and governance risks and opportunities. ESG initiatives are
becoming increasingly important for businesses, as they can help to improve their financial performance, reputation,
and risk management.

For SMEs, ESG efforts can be especially beneficial in the following ways:

Attract more customers and partners: Customers and partners are increasingly looking to
do business with companies that are committed to sustainability and responsible business practices. This means that
SMEs that have strong ESG initiatives can attract more customers and partners, which can lead to increased sales and
revenue. For example, a study by Nielsen found that 66% of consumers are willing to pay more for products from
sustainable brands. And a study by Salesforce found that 82% of customers are more likely to do business with
companies that have a strong ESG reputation.

Win more tenders and contracts: Many government agencies and large corporations now
require that their suppliers have strong ESG policies in place. This means that SMEs that are committed to ESG can
be more competitive for tenders and contracts, which can lead to new business opportunities. For example, the
Singapore Exchange (SGX) has a sustainability framework that requires all listed companies to disclose their ESG
performance. This means that SMEs that are suppliers to SGX-listed companies need to have strong ESG practices in
place in order to be considered for contracts.

Reduce costs: ESG initiatives can help SMEs to reduce their costs in a number of ways.
For example, by investing in energy efficiency, SMEs can save money on their energy bills. And by reducing their
waste, SMEs can save money on disposal costs. A study by the World Economic Forum found that companies that invest
in sustainability can save an average of 10% on their operating costs.

Improve employee morale: Employees are increasingly looking for jobs with companies that
are committed to sustainability and responsible business practices. This means that SMEs that have strong ESG
initiatives can attract and retain top talent, which can lead to increased productivity and innovation. A study by
the Boston Consulting Group found that companies with strong ESG cultures have 40% lower employee turnover
rates.

Improve brand reputation: A strong ESG reputation can help SMEs to improve their brand
reputation and attract positive media attention. This can lead to increased sales and revenue, as well as improved
customer loyalty. A study by the Reputation Institute found that companies with strong ESG reputations have 12%
higher customer loyalty rates.

In addition to the benefits mentioned above, ESG efforts can also help SMEs to comply
with regulations, attract investment, and mitigate risks.

• Compliance: Governments and regulators
  are increasingly setting ESG standards for businesses. By taking steps to improve their ESG performance,
  SMEs can help to ensure that they are compliant with these standards. This can help to avoid fines and
  penalties, and it can also help to protect the company’s reputation.

• Investment: Investors are increasingly
  looking to invest in businesses that are committed to ESG. This is because they believe that these
  businesses are more likely to be successful in the long term. By taking steps to improve their ESG
  performance, SMEs can make themselves more attractive to investors.

• Risk mitigation: ESG risks can have a
  significant impact on businesses. For example, climate change can lead to increased costs and
  disruptions.

By taking steps to mitigate ESG risks, SMEs can help to protect their financial
performance and their long-term viability.

Here are some specific examples of how ESG efforts can help SMEs to comply with
regulations, attract investment, and mitigate risks:

• A small manufacturing company could
  comply with environmental regulations by investing in energy-efficient equipment and by recycling its waste.
  This could help to avoid fines and penalties, and it could also help to improve the company’s reputation
  with investors.

• A small retail company could attract
  investment by demonstrating its commitment to social responsibility. For example, the company could donate
  to local charities or support fair trade practices. This could help to make the company more attractive to
  socially responsible investors.

• A small financial services company
  could mitigate climate risk by investing in renewable energy and by developing climate risk mitigation
  strategies. This could help to protect the company from financial losses caused by climate change.

• By taking steps to improve their ESG
  performance, SMEs can reap a number of benefits, including improved compliance, increased investment, and
  reduced risk. As a result, SMEs that are committed to ESG are more likely to be successful in the long
  term.

Overall, ESG efforts can be a valuable asset for SMEs. They can help to improve
financial performance, reputation, risk management, and attract more customers and partners. As a result, SMEs that
are committed to ESG are more likely to be successful in the long term.

Here are some specific examples of how SMEs can benefit from ESG efforts:

A small manufacturing company could reduce its environmental impact by investing in
energy-efficient equipment and by recycling its waste. This could lead to lower energy bills and disposal costs, as
well as improved air quality.

A small retail company could improve its social impact by donating to local charities
and by supporting fair trade practices. This could lead to increased customer loyalty and brand reputation.

A small financial services company could improve its governance practices by
implementing a code of ethics and by conducting regular risk assessments. This could help to protect the company
from financial losses and legal liability.

SMEs that are looking to get started with ESG efforts can do the following:

• Set clear goals and objectives. What do
  you want to achieve with your ESG efforts? Do you want to reduce your environmental impact, improve your
  social impact, or improve your governance practices? For example, you might set a goal of reducing your
  company’s carbon emissions by 20% by 2025, or of donating 1% of your profits to charity each year.

• Identify your strengths and weaknesses.
  What are you doing well in terms of ESG? What areas could you improve? For example, you might find that your
  company has a strong track record of environmental sustainability, but that you could do more to support
  your employees’ social and emotional well-being.

• Develop a plan of action. How will you
  achieve your ESG goals? What specific steps will you take? For example, you might develop a plan to switch
  to renewable energy sources, to implement a recycling program, or to create a volunteer program for your
  employees.

• Track your progress. It is important to
  track your progress and make adjustments to your plan as needed. For example, you might set up a dashboard
  to track your carbon emissions, or you might conduct surveys to measure employee satisfaction.

• Get involved in the community. There
  are many opportunities for SMEs to get involved in the community and make a positive impact. This could
  involve volunteering, donating to charity, or supporting local businesses. For example, you might partner
  with a local school to provide STEM education to students, or you might sponsor a community garden.

• By taking these steps, SMEs can start
  to reap the benefits of ESG efforts. They can improve their financial performance, reputation, risk
  management, and attract more customers and partners. As a result, SMEs that are committed to ESG are more
  likely to be successful in the long term.

Here are some additional tips for SMEs that are looking to get started with ESG
efforts:

• Start small. Don’t feel like you have
  to do everything at once. Start with a few small steps that you can realistically achieve.

• Be transparent. Communicate your ESG
  efforts to your customers, employees, and partners. This will help to build trust and credibility.

• Get certified. There are a number of
  ESG certification programs available for SMEs. Getting certified can help to demonstrate your commitment to
  ESG.

• Partner with other businesses. Working
  with other businesses can help you to share resources and expertise, and to achieve your ESG goals more
  quickly.

• Be patient. ESG is a journey, not a
  destination. It takes time to make a meaningful impact. Don’t get discouraged if you don’t see results
  immediately. Just keep moving forward and you will eventually reach your goals.

By taking these steps, SMEs can start to reap the benefits of ESG.