The global focus on the energy transition is intensifying. And while large, publicly listed companies.
are actively publicising their adoption of lower-carbon products and NetZero
Astargets are met, we tend not to hear how SMEs are adjusting to the winds of change.
So what does the transition mean for SME? energy traders? Not only does it offer enticing opportunities for new streams of
business (LPG, LNG, biofuels, waste oils and recycled products, etc.) and thus diversification; but also key stakeholders
are increasingly expecting SMEs to have a CSR or ESG strategy. Banks require these before allocating additional credit
lines; employees are seeking employers with a reputable sustainability agenda; and auditors and counterparties expect transparent reporting, compliance and governance processes and policies. As Rabobank’s Head Sustainable Trade &
Commodity Finance Richard Piechocki explains, “ESG is a matter of growing importance to banks and financial institutions.
Trading SMEs will be expected to have a plan in place demonstrating how they are contributing to the abatement of greenhouse gas emissions, as well as contributing to significant social and environmental needs in their supply chain.” While smaller enterprises have the advantage of being more agile, they can’t
reinvent themselves overnight. Transitioning to new trading lines requires planning and investment. The right talent
needs to be in place and shareholder equity commitment is required. And of course, there remains the on-going demand for oil products. The renewables infrastructure is not advanced enough to take over just yet.
The developed world is making confident strides, largely driven by regulation. However in emerging economies the energy transition is predominantly being managed by major corporations. Local SMEs are on the whole too busy
with the day-to-day challenges of logistics, supply, price fluctuations and
consumer demands. There are exceptions. In Ghana some local players are taking the lead. Engen Ghana Ltd. (acquired by Swiss trading entity Mocoh in 2019) is transforming its network of 40+ service stations. “We want our service stations to become green community hubs. Over the next two years we will be installing solar panels atall of our sites. These will not only power our stations, but produce surplus energy that we will give back to local communities, explains Managing Director Brent Nartey. Our service stations will also offerplastic recycling and other local community services, redefining the traditional petrol station experience.”We may be approaching the crossroads of lower-carbon and renewables andtraditional fossil fuels, but we still have a way to go and the pace of transitioning varies considerably across markets. What is clear however is that thereis room for Swiss SMEs working with emerging countries to play a valuable role in helping those markets accelerate their journey to a lower carbon future. ESG: Environment, Social and Governance
CSR: Corporate Social Responsibility LPG: Liquefied Petroleum Gas LNG: Liquefied Natural Gas.
