While sustainability considerations have become increasingly important, they are not getting any easier to navigate, especially for resource-stretched micro, small, and medium enterprises (MSMEs).
In Southeast Asia, there is growing momentum among MSMEs to adopt sustainability practices — driven by commercially motivated goals such as reducing costs, improving long-term efficiency, meeting consumer demand, entering new markets and attracting talent.
As significant variations in ESG awareness and adoption exist across Southeast Asia, advancing the adoption of ESG practices will require coordinated efforts from governments, industry associations, MNCs, investors, and financial institutions to provide MSMEs practical, constructive assistance.
That is according to the Transforming for Sustainability: Driving Impact and Value through Supply Chain Action report by the Centre for Impact Investing and Practices (CIIP), a non-profit entity established by Temasek Trust.
The study examined the role of Southeast Asia’s MSMEs in global supply chains, and explored key barriers to increasing supply chain sustainability and identifies practical enablers and tools across four sectors:
- Consumer goods
- Food and beverage
- Electrical and electronics
- Tourism
The survey revealed that 84% of MSMEs in the region have already adopted at least one sustainable practice, across ESG dimensions.
The study covers MSMEs from Indonesia, Malaysia, Singapore, and Vietnam. It includes perspectives from interviews with MNCs, industry associations, solution providers, and other key stakeholders, in addition to an MSME survey of over 3,500 MSMEs in the region.
This report is the second of a comprehensive two-part study, building on the foundational report prepared by CIIP and PwC Singapore, “It takes a community”: Enabling SME resilience in FMCG supply chains, published in April 2024. The first report focused on how SMEs in the fast-moving consumer goods (FMCG) sector from Indonesia, Malaysia, and Singapore were addressing sustainability-related challenges.
CIIP is a non-profit entity established by Temasek Trust in 2022 to foster impact investing and practices in Asia and beyond. It aims to contribute towards a sustainable future for all.
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