The Impact of UOB FinLab’s Sustainability Innovation Programme 2024
Find out how UOB FinLab empower SMEs in accelerating their sustainable journey through UOB FinLab’s Sustainability Innovation Programme 2024
Southeast Asian SMEs can mutually benefit from driving the circular economy
Image generated by DALL-E 3.
The linear economic model of “take, make and dispose” has long been a go-to economic template, but its strain on our environment suggests a need for sustainable change. This is especially true for Southeast Asia, which continues to need more efficiency in waste management as it contributes to over 80 percent of the ocean’s rubbish.
Moreover, inadequate recycling systems are rife in the region, where 90 percent of the region’s waste is discarded or burned. Even technologically advanced Singapore is known to generate around a million tonnes of plastic waste per year, which is typically incinerated with the remaining ash placed in the country’s Semakau landfill.
This is why we believe that driving a circular economy (CE) is so important. The circular model safeguards our environment by minimising waste through recycling and upcycling. The good news is that Southeast Asia has already adopted several guidelines surrounding the circular economy, such as the Framework for Circular Economy for ASEAN.
However, with the right support and expertise, SMEs can take circular economy initiatives to the next level. Moreover, SMEs themselves can experience the circular nature benefits of CE because they have the potential to enjoy reduced operating costs as well as boosted innovation and revenue streams.
Leveraging local circular economy initiatives
As Southeast Asia’s economic backbone, SMEs will be crucial for imparting circular business models, practices, and product offerings throughout the region. However, as agile and adaptable as SMEs can be, they can still struggle with instances of a lack of funding, regulatory hurdles, and inadequate mentorship.
There are several ways to counter these common SME challenges, and collaboration with the relevant stakeholders is vital. On the regulatory and policy front, we have seen many ASEAN nations develop several frameworks and guidelines for circular economy practices.
Singapore, for example, launched the Zero Waste Masterplan, which focuses the CE approach to waste management on three main areas: food, electronics, and packaging. Under this plan, the National Environmental Agency also announced a S$30 million Productivity Solutions Grant (PSG) that is open to SMEs and seeks to support the use of commercially green technologies (greentech), such as equipment and digital solutions that increase productivity.
While the grant benefits SMEs by enabling them to use greentech, UOB FinLab wishes to empower SMEs to create their own green technologies. The circular economy is all about establishing a cycle of sustainability. Thus, beyond the ability to make their own operations greener, SMEs that produce greentech offerings are empowered to complete their sustainability cycles – becoming an excellent example of a circular entity.
Greentech support and circular benefits
Innovating green technologies surrounding the circular economy requires funding, training, mentorship, and networking in elements of waste management, recycling and upcycling. These requirements are all available in UOB FinLab’s GreenTech Accelerator (GTA). A six-month regional programme, GTA provides a platform for global climate tech start-ups to scale and test their solutions. The programme also connects climate tech start-ups with businesses facing sustainability challenges.
Since its inception in 2022, GTA has helped to scale a diverse spectrum of start-ups in the region, including AlterPacks, a startup that harnesses organic waste to build a new material as an alternative to plastic packaging. A beacon of upcycling, Alterpacks exemplifies circular-based greentech and was assisted in its innovation process by UOB FinLab’s inaugural GTA. We are delighted to see such an innovator flourish in their green innovations and look forward to watching how they continue to instil circular economy principles in their users.
A more interesting phenomenon that can sprout from these green innovations is the cycle of benefits SMEs are presented with when embracing a circular economy approach. For instance, should SMEs reuse or recycle materials regularly, they can reduce reliance on expensive materials and waste disposal expenses – effectively reducing operating costs.
Moreover, as the circular economy spurs innovation by challenging businesses to rethink resource efficiency and waste minimisation, SMEs can explore new revenue streams from green innovations, such as the ones mentioned above that contribute to product life extension, biodegradability, and resource recovery.
Building partnerships with networks and alliances is key to driving circular economy
Implementing a fully functional circular business model entails honing specific skills and capacities based on corporate social responsibility practices, environmental research and development, and green market sensing. For SMEs, gaining this knowledge is possible through mentorship and training sessions provided by UOB FinLab’s GreenTech Accelerator, as well as other networking opportunities that connect SMEs with relevant industry experts.
As the name implies, the circular economy benefits both the environment and its drivers. SMEs can ensure the success of their circular transitions by learning about the various stakeholder support options available to them (such as GTA) and educating themselves on the long-term benefits of the circular economy for their own operations. Overall, if support systems and SME initiatives operate seamlessly together, fostering the circular economy will be a win-win for all involved.
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