Southeast Asian digital finance platform Funding Societies (operating as Modalku in Indonesia) has joined forces with Asian environmental, social and governance (ESG) data and technology solutions company STACS to use its ESGpedia platform to support ESG reporting and sustainable financing solutions for micro, small and medium-sized enterprises (MSMEs) in Indonesia.

As climate change and environmental concerns continue to be at the forefront of global challenges, businesses are under increasing pressure, the companies say, to adopt sustainable practices to meet regulations and maintain competitiveness. While MSMEs 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.

Through the partnership, Funding Societies will promote STACS’s ESGpedia platform to enable Funding Societies’ ecosystem of MSMEs to easily kickstart their ESG reporting journey. The partnership will also explore the provision of sustainability-linked and green financing options for MSMEs, based on data aggregated and collected on ESGpedia.

Through ESGpedia, MSMEs in Indonesia can get free access to a digital platform that simplifies various ESG standards and frameworks, as well as automatically converts operational data like fuel, refrigerant and electricity consumption to greenhouse gas (GHG) emissions under the standard GHG Protocol, localized to Indonesia. This allows the MSMEs as well as Funding Societies to gain greater insights into the company’s carbon footprint to facilitate sustainable financing decisions.

Funding Societies, the company says, will be able to tap ESGpedia’s vast data of over 5 million sustainability data points and 107,000 company profiles, aggregated and harmonized by its artificial intelligence (AI)-powered engine, to access vital ESG data for informed lending decisions.

Benjamin Soh, managing director at STACS, adds “SME enablement across Asean [the Association of Southeast Asian Nations region] is key in speeding up the region’s transition to net zero and maintaining its competitiveness in the global supply chain.”