The Asian Banker Friday, 19 July 2024

Funding Societies and STACS empower Indonesian MSME

5 min read

Funding Societies, operating as Modalku in Indonesia has joined forces with technology solutions company, STACS, to utilise ESGpedia platform to support environmental, social, and governance (ESG) reporting and sustainable financing solutions for micro, small and medium-sized enterprises (MSME) in Indonesia.

As climate change and environmental concerns continue to be at the forefront of global challenges, businesses are under increasing pressure to adopt sustainable practices to meet regulations and maintain competitiveness. While MSME play a pivotal role in the Indonesia economy, accounting for 99% of existing businesses in the country, many of them lack the expertise and resources to start on sustainability. Recognising this, STACS and Funding Societies have taken active steps to support MSME on their sustainability journey and to fill the current MSME ESG data gap in the Southeast Asia market, especially in Indonesia.

Through the partnership, Funding Societies will promote STACS’s ESGpedia platform to enable Funding Societies’ ecosystem of MSME to easily kickstart their ESG reporting journey. The partnership will also explore the provision of sustainability-linked and green financing options for MSME, based on data aggregated and collected on ESGpedia. Through ESGpedia, MSME in Indonesia can get free access to a digital platform which simplifies various ESG standards and frameworks, as well as automatically converts operational data like fuel, refrigerant, and electricity consumption to GHG emissions under the standard GHG Protocol, localised to Indonesia. This allows the MSME as well as Funding Societies to gain greater insights into the company’s carbon footprint to facilitate sustainable financing decisions.

Funding Societies will be able to tap on ESGpedia’s vast data of over five million sustainability data points and 107,000 company profiles aggregated and harmonised by its AI-powered engine, to access vital ESG data for informed lending decisions.

Benjamin Soh, managing director at STACS, said: “SME enablement across ASEAN is key in speeding up the region’s transition to Net Zero, and maintaining its competitiveness in the global supply chain. We are delighted to be partnering with Funding Societies to empower its ecosystem of SME in Indonesia in their ESG reporting journey. The partnership’s exploration of sustainability-linked and green financing options based on ESG data aggregated and collected on ESGpedia is also a step forward in improving access to sustainable financing for MSME in the region.”

The partnership is part of the ASEAN Single AccessPoint for ESG Data (SAFE) pilot initiative, led by the Sustainable Finance Institute Asia (SFIA) to address ESG data and disclosure gaps in ASEAN markets. The launch in Indonesia follows the successful launch of ESGpedia in other ASEAN countries: the Philippines with PDS Group in September, as well as in Vietnam with Bamboo Capital Group, earlier in August.

Arthur Adisusanto, country head at Modalku, said: “Funding Societies is committed to providing access to finance for MSME. We are delighted to be joining forces with STACS ESGpedia, to take our mission one step further, enabling MSME to be introduced to a platform that allows them to disclose ESG data in a straightforward way. This partnership will provide Indonesian MSME with the ability to be more conscious about their activities as well as with the financial resources necessary to invest in eco-friendly technologies, reduce their carbon footprint, and implement sustainable business practices.”

In addition to facilitating sustainable financing, STACS and Funding Societies plan to offer educational resources and guidance to MSME through workshops. These initiatives aim to promote awareness and understanding of how to navigate sustainability among MSME, ultimately driving positive change within the region. Two of Funding Societies’ sustainability pillars are “Stronger Planet” and “Stronger People”, pillars that aim to support the transition to a greener economy in Southeast Asia and focus on creating an inclusive, diverse, and equal space for its stakeholders to do business responsibly.

Re-disseminated by The Asian Banker

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