High energy costs have been squeezing both businesses and consumers
The global energy price spike over the past two years is the largest since the 1970s oil crisis, said the World Bank in its April 2022 Commodity Markets Outlook report.
In Singapore, the Monetary Authority of Singapore (MAS) revealed in an October report that the energy crunch and sharp rise in agriculture prices contributed to over two-thirds of core inflation pressures between June 2021 and June 2022.
Latest numbers from MAS on Wednesday revealed that, while electricity and gas inflation has eased, from 23.9 per cent in September to 19 per cent last month, the cost of utilities is likely to remain high.
With high utility bills hurting their bottomline, businesses are proactively looking for ways to cut their energy consumption. One solution: Leveraging technology for energy efficiency.
Enter Singapore’s Resync, a green technology start-up that uses an artificial intelligence-powered energy cloud platform to make buildings and homes “smarter” and more energy efficient.
The start-up, which has about 30 staff, has seen a significant increase in enquiries from businesses over the past two years, says CEO and co-founder Emir Nurov, 31. Resync was founded in 2017.
“Energy is one of the core commodities that are required by all businesses, and they are definitely struggling with the high electricity bills currently,” shares Mr Nurov, who has a Bachelor’s degree in electrical and electronic engineering and used to work in a solar manufacturing company.
“Five years ago, (energy efficient solutions) were a good-to-have. But now, businesses see it as an urgent need, and they’re proactively reaching to understand how our solution can help,” Mr Nurov adds.
Despite the shift to flexible working and work-from-home models, some businesses are still paying high electricity bills for their office buildings, he says. “They have started to realise the importance of facility management, which they may have overlooked in the past.”
“With energy efficiency increasingly becoming a business priority, they see it as critical to look into how to optimise energy usage.”
According to the Asean SME Transformation Study 2022, 65 per cent of small and medium-sized enterprises (SMEs) in the region indicated that sustainability is currently an area of importance and concern.
So SMEs see the urgency. But there are also challenges.
Three in five of them also cited high initial costs – such as investment in new talent, training, research and technology – as the most significant challenge in adopting sustainable practices. Other obstacles include a lack of dedicated resources and time (51 per cent), as well as a lack of expertise and know-how (48 per cent).
The Asean SME Transformation Study 2022 was jointly published by UOB, professional services firm Accenture and business analytics firm Dun & Bradstreet (D&B). Conducted in the first quarter of this year, it polled over 1,500 SMEs across five key Asean markets – Singapore, Indonesia, Malaysia, Thailand and Vietnam.
To address the key challenges of SMEs in adopting green technology solutions for their businesses, UOB’s innovation accelerator The FinLab launched The Greentech Accelerator (GTA) in May this year.
The global programme is aimed at supporting innovative greentech solution providers through funding, partnerships, mentoring, and educational sessions. It also provides funding support for SMEs that are keen on adopting greentech solutions from start-ups of the programme.
The programme focuses purely on cultivating and accelerating innovation, says Mr Shannon Lung, 39, head of The FinLab, UOB, so the greentech start-ups do not have to give up any equity to benefit from the masterclasses, mentorship, partnerships and pilot opportunities available through the programme.
Resync was one of 12 start-ups that participated in the inaugural run of GTA. Mr Nurov shares that the funding support provided by GTA gives its SME customers more confidence in piloting sustainability practices.
“Unlike large corporations, SMEs tend to have much shallower pockets. GTA addresses the very practical issue of cash flows for SMEs, so that they don’t have to pay a large upfront cost to go green,” he says.
“That really helps to empower more SMEs in their ESG (environmental, social and governance) push.”
Some of the common challenges that greentech start-ups face include the scalability and commercialisation of solutions, The FinLab’s Mr Lung observes.
“They may have built a product or service that is too focused on a particular segment, making it hard to scale. Some also lack opportunities to be matched with the right people, to help them commercialise the solution and expand to greater markets.
“GTA helps them solve these issues by leveraging The FinLab’s network of over 14,000 ecosystem partners and SMEs regionally. To date, the programme has established five partnerships and pilots for the greentech start-ups, with several more still in discussions,” says Mr Lung.
He adds that most accelerator programmes focus mainly on building capabilities and acquiring investments, but The FinLab’s GTA approaches it from a more “holistic ecosystem perspective” to drive actual business opportunities for the start-ups.
“We have established more than 160 business connections within the bank, ecosystem and industry partners, as well as our SME customers,” says Mr Lung. “There were more than 220 hours of networking sessions, curated masterclasses, and mentorships designed to help them grow and learn – both from experts and each other.”
The programme has helped bridge the gap between technology solution providers like Resync and SME customers, says Mr Nurov. “Through the programme, we gained deeper market understanding and forged market connections that have sped up the process of convincing end-users on the value propositions regarding sustainability solutions.”
At the same time, the end-users benefit from the exposure to the various greentech solutions available on the market. This helps them be more informed on what’s the best choice for their businesses, Mr Nurov says.
He sees a lot of potential in Singapore: “Compared to countries in the region, businesses in Singapore have a fuller understanding of what greentech solutions can do for them.”
“Beyond the immediate energy and financial savings, they also have a vision of how they want to create a more sustainable business model, and they are aware that digitalisation and greentech solutions are the way forward,” Mr Nurov says.
The Future of Finance series explores how digital solutions and insights can empower individuals and businesses in a rapidly changing world, to create a more sustainable future.
This article was originally published on The Straits Times and was written by Kareyst Lin, Content STudio.
Source: The Straits Times © SPH Media Limited. Permission required for reproduction
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