Rigorous Research.
Actionable Insights.
Actionable Insights.
Through a research-driven and stakeholder-inclusive approach, we create unbiased, thought-provoking content that inspires dialogue and engagement to foster broader systemic change.
Rigorous Research.
Actionable Insights.
Actionable Insights.
Through a research-driven and stakeholder-inclusive approach, we create unbiased, thought-provoking content that inspires dialogue and engagement to foster broader systemic change.
Building Supply Chain Resilience
A playbook offering practical, evidence-based approaches to create the conditions that could motivate and enable small and medium-sized enterprises to accelerate their low-carbon transition—strengthening both economic competitiveness and climate resilience.
A COLLECTIVE INTELLIGENCE PLAYBOOK
Small and medium-sized enterprises (SMEs) are the backbone of ASEAN’s economy—contributing up to 60% of GDP in some ASEAN member states and nearly 85% of total employment—powering local innovation and integrating into global supply chains. Yet, many SMEs grapple with cost pressures, fragmented guidance, and limited market incentives—factors that slow or even stall meaningful climate action. Compounding these challenges are intensifying climate disruptions and shifting regulations that increasingly threaten business operations and profits.
Under the guidance of the United Nations Development Programme (UNDP), the Asian Development Bank (ADB), and the Central Bank of Malaysia (Bank Negara Malaysia), PIE Strategy served as the research partner and lead author of this Playbook—delivering actionable approaches to translate strategic vision into real-world impact. By creating an enabling environment for a just transition, the Playbook helps strengthen both economic competitiveness and climate resilience across ASEAN.
Research insights from the Playbook were presented during the 12th ASEAN Finance Ministers and Central Bank Governors' Meeting in April 2025.
Small and medium-sized enterprises (SMEs) are the backbone of ASEAN’s economy—contributing up to 60% of GDP in some ASEAN member states and nearly 85% of total employment—powering local innovation and integrating into global supply chains. Yet, many SMEs grapple with cost pressures, fragmented guidance, and limited market incentives—factors that slow or even stall meaningful climate action. Compounding these challenges are intensifying climate disruptions and shifting regulations that increasingly threaten business operations and profits.
Under the guidance of the United Nations Development Programme (UNDP), the Asian Development Bank (ADB), and the Central Bank of Malaysia (Bank Negara Malaysia), PIE Strategy served as the research partner and lead author of this Playbook—delivering actionable approaches to translate strategic vision into real-world impact. By creating an enabling environment for a just transition, the Playbook helps strengthen both economic competitiveness and climate resilience across ASEAN.
Research insights from the Playbook were presented during the 12th ASEAN Finance Ministers and Central Bank Governors' Meeting in April 2025.
Download Playbook
By clicking the button you agree to our Privacy Policy
— Assistant Governor, Ban Negara Malaysia
"Export-oriented SMEs in ASEAN are at risk of losing USD237.5 billion in potential revenue if they fail to transition to greener and sustainable practices."
Harnessing the collective intelligence of multiple stakeholder groups, the Playbook introduces six tactical levers—each supported by practical steps—to bridge ambitious climate goals with tangible, on-the-ground outcomes. By doing so, it strengthens both economic competitiveness and climate resilience across ASEAN.
Keys to Greening Supply Chains in ASEAN
- MotivationHow might we motivate and enable SMEs to measure, track, and manage GHG emissions?
- Tools and InterventionsHow might we make policy tools, services, and interventions truly accessible to SMEs?
- Greening Supply Chain ModelHow might we enrich and scale the model of Malaysia's GVC Programme across ASEAN for regional resilience?
“
If I’m not profitable, none of this ESG talk matters.
We have staff to pay first.
We have staff to pay first.
KEY CHALLENGE #1
Unlocking The Business Case
Absent regulatory push or strong market pull, many SMEs remain unconvinced about the ROI for decarbonisation.
- Create Top-Down Demand
Mandate Scope 3 disclosure for publicly listed companies, government-linked companies. - Phase In Scope 1 and 2 Reporting for SMEs
Roll out reporting requirements by sector and enterprise size, with manageable steps. - Balance Carrots and
Sticks
Pair mandates with incentives (e.g., tax relief for filing audited carbon data in business license renewals) over a clear time horizon.
KEY CHALLENGE #2
Bridging The Capacity Gap
Limited technical know-how, jargon-heavy metrics, and insufficient training often stall real progress.
-
Demystify Carbon Metrics
Compare carbon factors to currency exchange rates so SMEs can easily link energy use to emissions. - Deploy Targeted, Sector-Specific
Capacity Building
Tailor resources by industry and leverage the right communication channels so SMEs can easily access available tools. -
Establish a Carbon Literacy Baseline
Integrate basic climate-awareness modules, backed by small training subsidies for broader uptake.
KEY CHALLENGE #3
Untangling The Clarity Challenge
Overlapping frameworks and fragmented guidance can overwhelm SMEs, making compliance and progress difficult.
- Harmonise Requirements to Simplify Compliance
Map frameworks and involve stakeholders early to reduce confusion. - Reframe the Narrative to Focus on Business Case
Highlight cost savings, new revenue, and growing consumer demand, and the risk of being left behind. - Simplify Green Financing and Empower RMs
Begin with providing prescriptive criteria, start with intensity metrics, and upskill relationship managers
“
Maybe we’ve found the right recipe to drive SME business… and working with them on green financing. SME business is actually a very profitable segment and a super growth area for us. Ultimately, it’s about alignment with our vision — profit, but also not leaving anyone behind.
From Strategy to Actual Uptake
The Playbook introduces six tactical levers—each supported by practical steps—to bridge ambitious climate goals with tangible, on-the-ground outcomes. By accelerating SME participation in emissions reductions at scale, it enhances decarbonisation efforts and strengthens resilience across ASEAN.
- Establish a Clear, Phased, and Agile Regulatory Pathway1
- Make Green Financing Progressively Accessible and Scalable2
- Anchor and Strengthen Decarbonisation in Supply Chains3
- Localise Climate Communication and Demystify Decarbonisation Domestically4
- Enhance and Align Platforms and Technical Infrastructure5
- Foster Ongoing Innovation and Cross-Sector Collaboration6
"We have no choice; our European customers want carbon data, so we studied and responded to their surveys. Eventually, we saw it could be good for us too."
— SME in manufacturing industry
Research Design
Breakdown of Interviewees
“
We have thousands of vendors. They ensure our security of supply... If they fail to meet global carbon requirements, we risk noncompliance ourselves or losing our vendor pool, which will affect our competitiveness in global markets.
Fostering Public Dialogue for Greening Value Chains
Press Briefing
Business Times -
Enhancing intra-ASEAN trade relations can help reduce risks amid global uncertainties
Enhancing intra-ASEAN trade relations can help reduce risks amid global uncertainties
Business Today -
ASEAN SMEs Must Go Green Or Risk Losing US$237 Billion In Potential Revenue
ASEAN SMEs Must Go Green Or Risk Losing US$237 Billion In Potential Revenue
The Edge -
Create business case for SMEs to decarbonise
Create business case for SMEs to decarbonise
The Edge -
Malaysia to continue with climate action, assisting businesses in sustainability reporting
Malaysia to continue with climate action, assisting businesses in sustainability reporting
FMT -
ASEAN SMEs stand to lose US$237.5bil without sustainable practices
ASEAN SMEs stand to lose US$237.5bil without sustainable practices
Bernama -
Export-oriented ASEAN SMEs Stand To Lose US$237.5 Bln In Revenue Without Sustainable Practices
Export-oriented ASEAN SMEs Stand To Lose US$237.5 Bln In Revenue Without Sustainable Practices
The Exchange Asia -
ASEAN SMEs Risk Losing US$237.5 Billion Without Sustainability Push
ASEAN SMEs Risk Losing US$237.5 Billion Without Sustainability Push
Trusted by leading organisations in Asia, working in partnership to drive a shared, sustainable future
