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This Week in AsiaEconomics

Southeast Asia’s SMEs emit more carbon than Cambodia and need state help to change, specialists say

  • The region’s 70 million-plus small and medium-sized enterprises often lack the skills or financial resources to commit to meaningful climate action
  • Owners’ personal values can play a major role, but more government help is also needed to finance emissions-reducing outlays, observers say

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Smoke rises from the chimneys of a coal-fired power station. Southeast Asia’s SMEs emit more carbon than Cambodia and Brunei combined. Photo: AP
Amy Chewin Kuala Lumpur

Southeast Asia has more than 70 million small and medium-sized enterprises (SMEs), accounting for some 97 per cent of all the region’s companies and at least 29.7 million tonnes of carbon emissions each year.

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This total, which is greater than the whole of Brunei and Cambodia’s annual emissions combined and comes close to equalling Laos’, makes SMEs an important force in the fight against climate change.

But analysts said such companies are often hampered by limited financial resources, as well as a lack of in-house knowledge, skills and capabilities – making it difficult for them to commit to meaningful climate action.

Sebastian Cortes, deputy director of Asian Trade Centre, which works with governments and companies to design better trade policies for the region, said that if SMEs are unable to meet their basic needs to keep afloat, such as access to working capital, it is “very difficult” to get them to engage with climate-related mitigation measures

SMEs have also been pummelled by the Covid-19 pandemic, with many left struggling to pay for their operating costs.

“The pandemic had a tremendous impact on the cash flows of many SMEs that then struggled to cover employee salaries and expenses and in many cases, stay in business,” Cortes said.

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