Media365
Sustainability has evolved from a strategic differentiator to a business imperative, especially for small and medium-sized enterprises (SMEs) in the Association of Southeast Asian Nations (Asean). Representing 97 per cent of private-sector businesses and 85 per cent of the labour force in the region, SMEs are critical to long-term economic growth. But with rising expectations for supply chains and growing investor scrutiny, embedding environmental, social and governance (ESG) initiatives into operations is increasingly essential for the survival and competitiveness of these businesses.
Across Asean, sustainable finance is playing a growing role in this transformation. The Asian Development Bank estimates the region will require US$210 billion in infrastructure investment annually through 2030, much of which must align with ESG standards to access international and private capital as regulatory pressure intensifies and investors’ appetite for sustainable instruments grows. Banks act as crucial intermediaries, channelling this capital into practical, impact-driven initiatives.
For SMEs, these shifts present both a challenge and an opportunity: while early movers can unlock new markets and financing, many other businesses still lack a clear starting point and the resources to implement ESG effectively.
Strengthening sustainable growth through financial leadership
Financial institutions are playing a vital role in helping Asean SMEs bridge the ESG gap. Banks can provide access to advisory services and financing solutions, creating an ecosystem that helps businesses overcome common barriers.
One of Asean’s largest banks, UOB, has seen an increasing uptake in sustainable financing solutions. Data provided by UOB shows that its portfolio reached S$7 billion (US$5.5 billion) within the first half of 2025 – the same amount achieved in the whole of 2024. This brings the bank’s total portfolio to S$66 billion.
