Why Big Business and Governments Need to Support the SME Transition into Sustainability

I’ve been at the forefront of policy-making and business innovation for decades.?

From this experience, I've seen firsthand the transformative power of collaboration between larger businesses, governments, and SMEs, especially when supporting SMEs' transition to become more sustainable.

Without the concerted effort of all stakeholders, we will fail to meet our environmental and business goals.

Here’s what we can do.?

I’ve decided to not travel as much in 2024.?

This has given me a lot of time to reflect.?

In a recent chat with my Chief of Staff, Stuart Mkojera-Thomson, I remembered an initiative we were involved with where we supported the integration of SMEs into the supply chain of a large multinational company.?

Initially (and for quite some time), the smaller companies struggled to meet the sustainability standards required.?

However, with guidance and resources provided by the larger company, these SMEs not only improved their practices but also became better at innovating, developing more cost-effective, sustainable solutions that the larger company later adopted.?

This experience solidified my belief in collaboration.

When big businesses support their smaller counterparts, everyone wins.?

In my advocacy work, I've pushed for policies that support SMEs in their sustainable transition.?

I've seen too many governments enact policies that seemed promising on paper but fell short in execution.?

From this, I learned that effective support goes beyond legislation; it requires active facilitation and resource allocation. Sustainability doesn’t happen in theory. Only through action and behaviour change.?

For instance, when I helped launch the Green Alliance in Singapore earlier in the year, I was particularly excited about its direct impact on providing SMEs with the tools and audits necessary for identifying sustainability gaps.

The Green Alliance's focus is to help SMEs navigate the pressure of sustainability by:?

• Providing up-to-date information on the regulatory requirements that affect customers’ performance, market access, and stakeholders’ demands.
• Supporting business owners on their triple bottom lines: profitability, people welfare, and planet conditions.
• Investing in SMEs to innovate in greenways through better products and/or services so that they can reach new and better markets and customers.

I’m proud of my good friend and President of the Singapore Manufacturing Federation (SMF), Lennon Tan, for championing this cause. Due to his dedication and leadership in this area I recently appointed Mr Tan as CACCI Vice-President - Sustainability. This position will allow Mr Tan, with my support, to further support SMEs in our region.

It’s not enough to just say something will happen.?

SMEs need a roadmap and fit-for-purpose support to make real change happen.?

I’m seeing a similar opportunity in Australia.

New disclosure laws will mean many big businesses will need to report on their Scope 3 emissions.?

Without going into too much detail, Scope 3 emissions are both large (making up 65–95% of most companies’ carbon impact) and indirect—a consequence of a company’s activities outside its direct control.?

Big companies will need to work closely with their supply chain to track and monitor.?

PwC has found that 80% of an organisation's supply chain emissions come from as few as one-fifth of its purchases. This means that in principle the agency could, within about ten years, cut its Scope 3 supply chain emissions in half by focusing on just those 20 suppliers.

Similar to Singapore’s situation, these smaller SMEs will need support to do this.?

SMEs who are able to make this transition quickly will be able to leverage a competitive advantage. SMEs who fail to see this change will be at risk of being left behind.?

Supporting them isn't just good ethics; it's sound economics.

• During my current tenure as President of the Confederation of Asia-Pacific Chambers and Commerce and Industry (CACCI), I advocated for and witnessed the benefits of shared knowledge.
• As President of the Victorian Chamber of Commerce and Industry (VCCI), I pushed for an agenda that supported the needs of SMEs.?

• When I was the Mayor of Geelong, I was elected on a policy platform to help local businesses win more government work.?

Large enterprises have resources and reach, but SMEs bring fresh perspectives and agility.?

By facilitating platforms where knowledge sharing is reciprocal, we foster an environment of mutual growth and learning. As a by-product, mutual value is created that can be shared with customers and broader society.?

I don’t get to say this often, but it’s a win-win-win situation.?

But there are considerations

If it were easy, everyone would be doing it.?

Collaboration is hard. It takes time and years of relationship-building before it pays dividends. Yet, the journey of collaboration, despite its challenges, can be immensely rewarding.?

In my business and philanthropy, the most fruitful collaborations didn't just happen; I had to cultivate them carefully, with patience and mutual respect.

For example, at the Good Business Foundation, we’ve built a network of vetted and high quality delivery partners such as ygap, Good Return and most recently, The Difference Incubator (TDi).

These relationships weren’t built overnight.?

They took years of conversation, working on smaller collaborations, and building up trust over a long period of time.?

By engaging deeply with partners, listening actively to their needs and perspectives, and committing to shared goals, we strengthen our bonds and make our outcomes more impactful.?

This proactive approach accelerates the process and enriches it, allowing us to learn from each other and leverage our strengths in ways that solitary efforts never could.

This isn't just about business—it's about our future.?

The transition to a sustainable global economy requires every player on the field, especially SMEs, who are essential yet often overlooked. Through policy, partnership, and shared purpose, we can support these vital players in the global economy to not only survive but thrive.

The responsibility is enormous, but so is the opportunity.?

Together, with a clear vision and unwavering commitment, we can ensure that the shift towards sustainability strengthens our economies and protects our planet. Let's not wait for change to happen; let's drive it together.

Till next time,?

Peter

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