Globally, 20,000 companies are disclosing emissions data to Carbon Disclosure Project, and more than 4,000 companies have set science-based targets for reducing emissions of greenhouse gases. More than 400 companies have joined the RE100 campaign, committing to move to 100% renewable electricity, with more than 150 of these companies operating in Southeast Asia.
Across Southeast Asia, small and medium enterprises (SMEs) are pivotal for the region, driving economic growth, creating jobs, and supporting community development. With their significant role in the supply chain of multinational corporations (MNCs), they are integral to global climate action. And given their substantial economic footprint, it is important to involve SMEs in decarbonization efforts.
The Real Challenge: Will or Knowledge?
While it is tempting to assume that SMEs might be lagging in decarbonization due to a lack of will, the reality is often more complex. Many of these enterprises are not unwilling to embrace sustainable practices; rather, they are grappling with a significant knowledge gap that hinders their ability to take meaningful action.
The corporate sector has a huge role to play in driving the greenhouse gas emission reductions that are urgently needed. However, SMEs often find themselves asking: Where do we get started, and how do we build a plan that will lead us toward a low-carbon future? Without access to the latest technologies, expertise, and strategic guidance, they may struggle to answer these questions and keep pace with the demands of a low-carbon economy, regardless of their intentions.
Knowledge Gaps in Decarbonization Planning
For many SMEs in Southeast Asia, the journey toward decarbonization is fraught with challenges, beginning with the financial burdens associated with adopting green technologies. These costs can be overwhelming, and even when financial resources are accessible, a more significant challenge often emerges: the strategic knowledge needed to effectively plan and implement decarbonization initiatives. SMEs frequently find themselves at a critical juncture, lacking both the expertise to develop comprehensive strategies and the insight into where to access the necessary funding. This dual knowledge gap frequently hampers their ability to translate sustainable intentions into concrete actions.
These challenges are exacerbated by the complex and inconsistent regulatory landscape across Southeast Asia. Staying abreast of evolving regulations requires not just financial resources but also a sophisticated understanding of policy nuances and their implications for long-term planning. Without this expertise, many SMEs struggle to navigate the regulatory environment, making strategic decarbonization planning an even more daunting task. The regulatory uncertainty often discourages SMEs from committing to ambitious decarbonization goals, further widening the gap between intent and implementation.
Bridging the Knowledge Gap: Who Can Help?
To overcome these challenges, SMEs need more than just financial support—they need knowledge. National governments, financial institutions, multinational corporations (MNCs), and international organizations all have a role to play in bridging this gap. Providing SMEs with the right information, technical assistance, and access to best practices is crucial. However, SMEs often require guidance in tapping into these resources and making informed decisions that align with their specific needs.
This is where the Southeast Asia Corporate Decarbonization Exchange (CDx) can play a pivotal role.
CDx: A Platform for Knowledge and Collaboration
CDx, organized by Asia Clean Energy Partners (ACE Partners) in Bangkok from October 1-2, 2024, aims to address these very challenges. By providing a collaborative platform, CDx offers SMEs the opportunity to access the knowledge and connections they need to bridge the gap between will and capability. Unlike traditional industry events, CDx focuses on interactive learning and collaboration, helping businesses to navigate their decarbonization journeys more effectively.
“CDx is going to give you the tools, the information, and the connections to start planning your decarbonization journey,” says Mark Lister, Co-CEO of ACE Partners and Co-Convenor of CDx.
The event will facilitate the exchange of best practices, innovative solutions, and actionable roadmaps tailored to the unique needs of the region through modules on ‘Understanding the State of Play’, ‘Planning Pathways for Decarbonization’, ‘Executing Projects and Securing Finance’, and ‘Reporting & Brand Visibility’ in its agenda. By fostering a community of practice and offering continuous learning opportunities, beyond the two days of the event, CDx can empower SMEs and other businesses to embark on their decarbonization journeys more effectively.
The Path Forward: Empowering SMEs
For Southeast Asia's SMEs, the path to decarbonization is filled with challenges, but also opportunities. By addressing the knowledge gap and providing the right support, stakeholders can empower these businesses to contribute meaningfully to global climate goals. The CDx event is a crucial step in this direction, offering SMEs the chance to gain the knowledge and tools they need to thrive in a low-carbon economy.
While the challenges SMEs face in corporate decarbonization are significant, the root cause often lies not in a lack of will but in a lack of knowledge. Strategic initiatives like the CDx event can play a critical role in bridging this gap, ensuring that SMEs are not left behind in the global transition to sustainability. The question remains: With the right support, will Southeast Asia's SMEs rise to the challenge, or will they be set up to fail?
