Sustainability is good for business

Going green is often associated with higher costs. For many small and mid-sized enterprises (SMEs), this can mean automatically relegating sustainability to the back burner as something only larger companies can afford. But becoming sustainable can save SMEs money, with the business benefits far outweighing any initial investment.

Firms that shift to making sustainability a core part of their strategy are finding that it improves the bottom line, reduces risks and increases competitiveness and the number of satisfied customers. Business as usual, on the other hand, can end up costing your company. Here’s how.

A growing number of large Singapore companies are reporting that they are reducing costs through sustainable practices, providing a potential model for SMEs. CapitaLand, for example, has achieved cumulative utilities cost avoidance of S$320 million, thanks to more efficient use of resources.¹ In 2021, it increased its use of renewable energy to about 4.3% (47,800 MWh) of its total electricity consumption and aims to increase its total electricity consumption to 35% by 2030.

At HSBC, we have been cutting our energy use. In October 2020, we announced our ambition to reduce our energy consumption by 50% by 2030, against a 2019 baseline, and in 2022 we achieved 24%.² We’re also making good progress on our aim of getting 100 per cent of our electricity from renewable sources by 2030.

Your sustainable practices can also make your company more attractive as a workplace. Many young and discerning employees now pick an employer based on its green track record. A Deloitte survey covering 46 markets, including Asia-Pacific, found that millennials and members of Generation Z⁴ who are satisfied with their employer’s societal and environmental impact are more likely to want to stay with their employers.⁵

In a HSBC survey, 72% of Asian investors have increased their attention⁶ to environmental issues, social issues or both in the last 12 month, indicating the strength of momentum supporting sustainable economic change in the region.

SMEs could also miss out on profitable government contracts if they don’t have robust sustainability practices. The Singapore Government, for example, procures only printing paper with the Singapore Green Label.⁷ This means that only paper suppliers with sustainable land and forestry management practices can win contracts with government agencies.

Cutting back your business’s environmental footprint need not be difficult or complex. Here are three easy ways you can embrace sustainability and make a difference:

• Conserve resources that your business uses daily. Trim your energy and water use, go paperless and replace your energy-guzzling appliances with power-efficient options.
• Consider expanding into eco-friendly products. You can start with one or two product segments that use sustainable materials. Focus on lines where there’s demand for more sustainable options.
• Transition to net-zero with sustainable financing. You can consider financing sustainable initiatives using solutions such as HSBC’s green loans and Enterprise Financing Scheme – Green*, which are intended to help SMEs on their sustainability journey.