Consumer Goods Sector
Empowering consumer goods MSMEs through Procurement Standards and Educational Initiatives
Scroll down
ESG awareness varies across different countries and industry sectors
Not familiar
Moderately familiar
Very familiar
Survey question: How familiar is the management of your company with the concept of sustainability/ESG for business?
Note: Figures have been rounded to the nearest whole number.
ESG practice adoption rate across countries and sectors – average number of practices and percentage of MSMEs implementing at least one
Average number of ESG practices per MSME
Percentage of MSMEs having implemented at least one practice
Survey question: Has your company taken any actions or adopted practices in the following areas to 1) reduce its environmental impact, 2) increase its social impact, and 3) ensure its good governance? Please select all that apply.
Note: A p-value of less than 0.05 indicates statistical significance, in which the null hypothesis is rejected. Figures have been rounded to the nearest whole number.
Year of initial ESG adoption by companies
Indonesia
Malaysia
Singapore
Vietnam
Weighted sample: n = 841 | Survey question: When did your company first begin adopting ESG policies or practices?
While consumer goods MSMEs did not rank highest in ESG awareness, with 64% reporting moderate to high familiarity with sustainability issues, this still signals a meaningful level of engagement. Given the sector’s exposure to climate-related risks in raw material sourcing, shifting consumer demand for sustainable products, and increasing scrutiny over waste and packaging, ESG considerations are becoming central to long-term competitiveness in this space.
Based on our survey, when examined on a country basis, there emerge large disparities across markets in terms of awareness of ESG practices for businesses, with larger awareness gaps present in Indonesia and Malaysia relative to Singapore and Vietnam. This corresponds to the recency of adoption of ESG practices among the region’s MSMEs.
Singaporean MSMEs were the earliest adopters of ESG practices, while most MSMEs in Indonesia, Malaysia, and Vietnam adopted such practices only in the last 2 years.
Key reasons for adopting sustainability/ESG practices in each country
Regulatory pressures and incentives, supplier compliance obligations, and shifting consumer preferences have contributed to the quickening pace of adoption of such practices in the region over the last 2 years. The primary motivations for the adoption of ESG practices remain commercial.
Cost-savings through increasing long-run efficiency in business operations, meeting increasing customer demands for sustainable products or services, and measures to mitigate reputational risks are the leading motivations for the adoption of ESG practices.
Key challenges to adopting sustainability/ESG practices in each country
Key barriers to acting on these motivations in the consumer goods sector include limited in-house skills, low awareness about ESG issues, and high implementation costs. In particular, limited in-house skills is the top barrier in Indonesia, high implementation costs the highest for Singapore, low awareness of ESG the highest in Malaysia, and difficulty in sourcing sustainable suppliers the highest in Vietnam.
These reflect different challenges and different priorities faced by consumer goods MSMEs across markets, which different ecosystem stakeholders may be well-poised to address, whether by developing more training and awareness programmes in Indonesia and Malaysia, building larger based of sustainable suppliers in Vietnam, or providing more preferential sustainable financing in Singapore.
Corporate client incentives for increasing ESG practices
 |
 |
 |
 |
|---|
Weighted sample: n = 956 | Survey question: Which types of incentives from a corporate client would most impact your company’s decisions to consider further increasing its sustainability/ESG practices? Please select up to 3 options that apply. | Note: The top two incentives for each country are highlighted.
Securing commercial contracts for ESG-complaint MSMEs will be important to spur change. Commercial incentives are the top incentives identified by consumer goods MSMEs in our sample for increasing the adoption of ESG practices, especially generating longer-term contracts guaranteeing steady business and higher prices for sustainable products or services.
The intense competition that exists across consumer goods sectors, and especially among major MNCs seeking to retain their competitive advantage amidst rapidly shifting consumer demands, makes it worthwhile for these MNCs to consider how they can address MSMEs’ motivations in such a way that together, they build long term relationships which enable them to respond swiftly and effectively to changing market tastes.
Key Findings for the
Food and Beverage Sector