Why Aren’t More SMEs Decarbonising? Perhaps We Are Solving Only Half The Problem.

In my previous post, I argued that green fuel will not scale on technology alone; the commercial model must work too.

The same may be true for SME decarbonisation.

Singapore is building a stronger SME sustainability ecosystem through Green100 and TR 149, with Singapore Business Federation (SBF) mobilising businesses and Gprnt lowering barriers to basic disclosure and sustainability readiness. Green100 mobilises SMEs through large enterprises or “Queen Bees”, with free Essential-level disclosure through Gprnt and pathways into procurement and financing.

But getting started is not the same as decarbonising.

The 2025 SME Sustainability Barometer found that three in four SMEs had yet to begin their sustainability journey, with money, skills and time among the main barriers. Four in five also lacked clarity on the tangible returns from sustainability investments.

This points to a harder question:

What actually makes an SME invest in decarbonisation?

Carbon accounting can tell an SME where its emissions come from.

A decarbonisation roadmap can tell it what actions are possible.

But neither necessarily answers the business question:

“Why should I invest now?”

For measures with strong positive returns — energy efficiency, process optimisation or solar where viable — cost savings may be enough.

The harder challenge is deeper transition: projects that reduce carbon but require upfront capital, have longer payback periods, or are not sufficiently attractive to the SME on a standalone basis.

This is where large buyers — or Queen Bees — can play a more powerful role.

The incentive does not always need to be a green price premium. It could be a longer-term contract, guaranteed volume, faster payment, preferred-supplier status, stronger tender recognition, co-funding or access to financing.

In other words:

𝗧𝗵𝗲 𝗯𝘂𝘆𝗲𝗿 𝗰𝗮𝗻 𝗵𝗲𝗹𝗽 𝗰𝗵𝗮𝗻𝗴𝗲 𝘁𝗵𝗲 𝗲𝗰𝗼𝗻𝗼𝗺𝗶𝗰𝘀 𝗼𝗳 𝘁𝗵𝗲 𝘁𝗿𝗮𝗻𝘀𝗶𝘁𝗶𝗼𝗻.

And this needs to be scalable.

A Queen Bee engaging 100 SMEs cannot support 100 bespoke consulting projects. Digital screening can identify where the biggest carbon, commercial and transition opportunities sit, while deeper technical and financial analysis is focused only where it matters.

Perhaps the next generation of SME sustainability programmes should therefore be judged not only by how many SMEs complete a carbon footprint, but by how many actually implement credible transition projects — and whether those projects strengthen the SME’s competitiveness at the same time.

𝗧𝗵𝗲 𝗻𝗲𝘅𝘁 𝗰𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲 𝗶𝘀 𝗺𝗼𝘃𝗶𝗻𝗴 𝗳𝗿𝗼𝗺 𝗦𝗠𝗘 𝘀𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗿𝗲𝗮𝗱𝗶𝗻𝗲𝘀𝘀 𝘁𝗼 𝗶𝗻𝘃𝗲𝘀𝘁𝗮𝗯𝗹𝗲 𝗦𝗠𝗘 𝘁𝗿𝗮𝗻𝘀𝗶𝘁𝗶𝗼𝗻.

#SMEDecarbonisation #SupplyChainDecarbonisation #Scope3 #GreenProcurement #Green100 #TransitionFinance #SingaporeSustainability