SINGAPORE, May 7 – The Centre for Impact Investing and Practices (CIIP) has released a new report titled “Transforming for Sustainability: Driving Impact and Value through Supply Chain Action”, highlighting the need for coordinated ecosystem support to enable micro, small, and medium enterprises (MSMEs) across Southeast Asia to adopt sustainable practices more effectively.
Launched during the Ecosperity Week 2025’s Impact Investing Roundtable, the report finds that while many MSMEs are motivated to implement sustainability and ESG (Environmental, Social, Governance) practices—after being driven by factors like cost savings, long-term efficiency, consumer demand, market access, and talent attraction. These are the practical challenges that continues to hinder widespread adoption.
“MSMEs are the backbone of Southeast Asia’s economies and essential partners in advancing sustainable supply chains,” said Ms. Dawn Chan, CEO of CIIP. “Their growing interest in ESG signals a real opportunity to unlock business resilience and long-term value. This report provides actionable insights for how governments, corporates, and ecosystem players can work together to accelerate impact.”
Key Findings:
- 84% of MSMEs surveyed have adopted at least one ESG practice, with social and environmental actions—such as employee protection and waste management—being the most common.
- Despite positive momentum, 60% of MSMEs report moderate to significant challenges in hiring sustainability or ESG talent.
- High upfront costs and a lack of immediate business returns remain top barriers, though 50% of MSMEs plan to increase their ESG budgets by 2027.
- A survey of over 3,500 MSMEs across Indonesia, Malaysia, Singapore, and Vietnam, supported by 85 stakeholder interviews, informed the report’s findings.
Five Key Recommendations to Support ESG Adoption:
- Simplify ESG Communication – Emphasize commercial benefits and actionable pathways to show that ESG is achievable in practical steps.
- Build Capacity – Create sector-specific toolkits and encourage use of external ESG expertise.
- Foster Win-Win Buyer-Supplier Partnerships – Encourage MNCs to support MSME suppliers with incentives like better contract terms and pricing for sustainable goods.
- Invest in MSME-Focused Innovations – Mobilize venture capital and impact investors to support solutions built specifically for MSMEs.
- Strengthen Financing Ecosystem – Combine concessional finance with practical guidance and tools like digital ESG assessments to better support adoption.
The report also pointed out that conditions and sectoral differences that are specific to certain countries also played a crucial role in ESG implementation, which necessitates solutions tailor-made to the local landscape.
The Announcement of New Initiatives:
Lining up to the report’s findings, CIIP signed a Memorandum of Understanding (MOU) with the Singapore Fashion Council (SFC) to develop a sustainability sectoral plan, guidebook, and digital toolkit tailored to the needs of MSMEs in the fashion and textiles industry.
Additionally, CIIP and the Philanthropy Asia Alliance launched the second edition of the Amplifier mentorship programme, targeting solutions for supply chain sustainability in both tourism and fashion and textiles, supported by over 55 cross-sector partners.
CIIP is calling for more partners to join their cause—industry bodies, corporates, solution providers, and investors—to join its mission to accelerate ESG adoption among Southeast Asia’s MSMEs.
For more information and to access the full report, visit:
🔗 CIIP Report – Transforming for Sustainability
Full announcements are available at:
🔗 Temasek Trust Newsroom
