For SMEs, going green has its rewards, but trying to maintain a sustainable green culture is a challenge, reports JASLENE PANG
Business Times 16 Mar 10;
AS the global economy recovers in the roaring tiger year, the next hurdle for companies to cross could be environmental concerns. With the Apec SME summit on green opportunities for SMEs and the Copenhagen summit, the green buzz is getting distinctly louder. And SMEs can carve a niche for themselves by going green, regardless of the industry they are in.
At January 2010, 99 per cent of companies in Singapore were small and medium enterprises. They feel the intensity of competition more than multi-national companies as they are part of a value-chain where suppliers like them are plentiful.
Many SMEs are recognising they can become the preferred partners of bigger corporations if they adopt eco-friendly and sustainable practices.
'Clearly, Lenovo or Fujitsu will not work with suppliers who do not have green manufacturing practices, or risk losing credibility over any part of their manufacturing supply chain is not environmentally friendly,' said Howard Shaw, executive director of the Singapore Environment Council (SEC).
SEC, a non-profit and non-government organisation that facilitates environmental causes locally, administers a holistic environmental award - The Singapore Environmental Achievement Awards (SEAA).
John Lim, group general manager of K C Dat - an SME offering relocation services - shares this sentiment.
'We have been doing the 3Rs - recycling, reusing and reducing - in house all along,' he says. 'This was common sense to us. But one day, our customer Tetra Laval told us it would give us two years to get certified as environmentally friendly, or our deal was off. Weighing our options, we decided to apply for the ISO 14001 certification.'
Tetra Laval is a private multinational corporation of Swedish origin.
'Eight of 10 of the foreign companies we work with ask for our environmental qualifications and policies,' Mr Lim says.
The number of green-conscious consumers is vast these days, so companies cannot afford to upset them. 'It was very difficult to sell the idea of being green 22 years ago,' says Peter Ko, managing director of Crusade Services.
But that's not the case now. So Crusade - a SME that provides cleaning services - decided to be green right from the start, because it saw it would be something special. 'We want to be outstanding - better than just 'biodegradable',' says Mr Ko.
Siloso Beach Resort is another SME that has been green since the planning stage.
But Kelvin Ng, executive director of Siloso Beach Resort, says the reason was as simple as 'doing the right thing'.
'Even if it's a one-person company, no company need wait until regulation or expansion kicks in to go green,' says Mr Ng. 'Future generations will be thankful we took the first step.'
Still, the expense of going green may be a source of inertia for some SMEs.
There is the cost of getting certification, as well as regular staff training. Mr Ko spent $80,000 to obtain ISO 14000 certification, a standard for environmental management systems that is applicable to any business, regardless of size, location or income. On top of that, he spent $1,500-2,000 for bi-monthly staff training.
However, this 'is the only way to go', and green efforts do pay off, as seen from the increase in Crusade's revenue of 5-10 per cent from last year. Although the increase in revenue cannot be said to be solely due to the green movement, it does play a part.
As Sunny Koh, managing director of Chinatown Food Corporation, puts it: Going green can increase profits by reducing the cost of production. His company saved about $30,000-$40,000 by simply reducing the thickness of plastic used in packaging by about 10 microns.
'There are other ways to cut costs too,' he says. 'You can reduce freight and warehousing charges by transporting or storing more food due to the smaller packaging.'
Mr Lim says K C Dat saved $13,000 on disposal costs for wooden waste alone in the first year alone.
But the savings are 'only a bonus' and should not be the main reason for going green, because 'being green has to be sustainable and lots of time and commitment is needed', he adds.
For many SMEs, trying to maintain a sustainable green culture is a challenge.
But SMEs are not alone. According to SMEs from various industries that BT spoke to, having like-minded green friends is a big help, be it to award a certificate if a companies meets requirements, or just to provide green advice.
For example, SEC has an ongoing programme to raise awareness about environmental issues among companies and to cultivate green habits. Called Project: Eco-Office, it has launched resource kits to encourage workers to improve environmental practices in offices.
Adding weight to the call to go green, Renny Yeo, President of Singapore Manufacturer's Federation, says: 'Green business practices are here to stay. We either adopt them and do well - or become obsolete without them.
'It is increasingly important for our manufacturers to adopt green business practices, not only boost their corporate social responsibility profiles but also to attain long-term sustainability and gain a competitive edge in a growing market of environmentally conscious consumers.'
