Environment, Sustainability and Governance (ESG) efforts for a long while now were perceived as optional strategic add-ons for small and medium-sized businesses (SMEs). PwC’s 2024 Global Investor Survey reveals that 75% of respondents would inject significant investments into businesses that focus on climate-related actions.
What this means is that ESG compliance can no longer be ignored, especially for SMEs that are looking to grow and scale in the long run. Singapore’s startup and SME landscape is shifting from voluntary pledges towards mandatory execution, and in 2026, ESG could very well be the barrier between SMEs and their next big grant, bank loan, venture capital funding, or business deal. The bridge between sustainability efforts and the bottom line is now as clear as ever: you cannot access green finance without green finance reporting.
It’s the end of being vague about ESG initiatives. Singapore’s green finance infrastructure, built by the Monetary Authority of Singapore (MAS), together with other key players such as Temasek Holdings, GIC, and local financial institutions (just to name a few), has matured to the point where the barriers to green finance reporting are much more accessible.
The barrier for green finance reporting is no longer complexity. It is knowing where to start.
The “green rate”: How green finance reporting lowers the cost of capital
Between 2020 to 2024, 261 green, social, sustainability, and sustainability-linked loans (GSSSL) were taken up by Singapore companies, amounting to $137.3 billion. These loans, offered by DBS, OCBC, UOB and other local banks, offer loans of variable interest rates based on ESG performance. In other words, if you hit more targets, you pay less, and vice versa.
This incentive structure directly ties performance to interest rates. It’s highly effective, and on paper sounds simple. However, the complexity that many SMEs struggle on is navigating the eligibility and requirements financial institutions look for to even offer these loans in the first place.
MAS launched the Singapore-Asia Taxonomy for Sustainable Finance (SAT) in December 2023 as a response to this. The SAT sets out clear, science-based definitions and criteria to determine green and transition corporate activities that substantially support mitigating climate change. It includes a traffic light system that helps scope activities into 3 sustainability tiers. Additionally, Singapore’s local banks (DBS, UOB and OCBC) have either completed or in the process of updating their sustainable financing frameworks to integrate the SAT. Thus, aligning your operations with the SAT framework gives banks a solid reference for classifying loans more efficiently.
Green initiatives aren’t just at the business level; they encompass the whole value chain
To strengthen Singapore’s position as a global leader in sustainable business practices, the Accounting and Corporate Regulatory Authority (ACRA) has mandated that all Straits Times Index (STI) constituent companies must report their Scope 3 greenhouse gas emissions, indirect emissions that occur across the entire value chain, from FY2026. For non-STI constituent companies, Scope 1 and 2 emissions must be reported, while Scope 3 reporting remains voluntary for now.
If you’re an SME that works with multinational companies (MNCs), this means your carbon footprint is part of someone else’s compliance.
This also means that MNCs that SMEs partner with will require emissions reporting. Avoiding it or providing inaccurate data will bear unfavourable consequences for all stakeholders. It goes without saying that the ideal situation is to avoid becoming a liability in reporting.
Many procurement teams in MNCs are building and forging partnerships with preferred suppliers and vendors that have a proven track record and strong ESG credibility. The strategic move for SMEs is obvious: disclosure in sustainability efforts doesn’t just show compliance, they build up a reputation of being transparent and safe to collaborate with.
The barriers to green finance reporting are at an all-time low
Gprnt, MAS’ integrated digital platform for ESG data collection and access, has become a reliable digital reporting solution for both MNCs and SMEs to declare their ESG information. Singapore SMEs can now automatically measure and report Scope 1 and 2 emissions at no cost in just minutes. Since May 2025, Gprnt has onboarded over 1,000 SMEs and almost 100 solution providers.
Additionally, there are specific funding instruments that SMEs can take advantage of to boost their ESG compliance, such as EnterpriseSG’s Enterprise Sustainability Programme which provides grants of up to 70% for sustainability project costs, and MAS’ Sustainable Loan Grant Scheme that offsets up to $125,000 for businesses seeking to validate their GSSSL loans against international standards.
An SME’s first sustainability report does not need to be perfect. It needs to be honest, specific, and published. Everything that follows, including the loan conversations, the tender submissions, the brand narrative gets easier once the data exists.
If you’re looking to translate ESG data into communications strategies, we’ll take you further. Drop us an email at hello(a)syncpr.co today.
Also read: B2B tech PR Singapore: Choosing regional PR for ASEAN fintech expansion