Bangkok:Dr. Pipat Yodpruittikarn, President of the Thai Institute of Development, outlines survival strategies for small and medium-sized enterprises (SMEs) to navigate the competitive business landscape by focusing on sustainability. Businesses must reassess their health post-natural disasters and volatile economic conditions to plan for sustainable growth.
According to Thai News Agency, Dr. Pipat identifies three stages of the business life cycle survival, growth, and sustainability. While many SMEs are currently in the growth stage, few have achieved sustainable, long-term growth. To transition from growth to sustainability, businesses must focus on planning, execution, and communication layers.
Dr. Pipat emphasizes the importance of preparing three informational documents for a competitive advantage a product catalog, a company profile, and an ESG profile or sustainability report. These documents answer crucial questions about what the business offers, why customers should choose them, and how their operations benefit society and the environment.
As ESG factors become increasingly significant for consumers and major business partners, SMEs face pressure to demonstrate sustainability. However, Dr. Pipat warns against overclaiming in ESG profiles, as discrepancies discovered during audits can damage reputations and business relationships.
To assist SMEs, the European Union developed the VSME Standard, a voluntary sustainability disclosure standard. This standard streamlines ESG data collection into a manageable format, addressing environmental, social, and governance aspects relevant to SMEs.
Dr. Pipat highlights the potential return on investment for ESG reporting. While the cost is approximately 60,000 baht annually, financial benefits such as green loans and increased orders can significantly outweigh this expense. SMEs adopting sustainability practices have seen substantial revenue growth and improved relationships with European investors.
He advises SMEs to proactively communicate with major clients to understand future ESG requirements, allowing them to adapt and capitalize on business opportunities. Sustainability reports are not just obligations but strategic tools to build trust, attract clients, and foster growth.