An issue of rising concern among food and beverage manufacturers in Southeast Asia is the escalating energy costs which have direct impact on manufacturing costs across all industries. AFBR has managed to gain deeper understanding of this ongoing crisis through an interview with Benjamin Soh, Founder and Managing Director of ESGpedia, to find out which industries are the most heavily impacted, and its potential long term impact on the F&B industry as a whole. It also identifies the indirect positive impact of the crisis towards greater adoption of ESG and sustainability practices.
The following are excerpts from the interview with him:
With the ongoing Gulf War/Turmoil, energy cost has spiralled. How does this affect manufacturers particularly in the food and beverage sector?
Energy costs have always been a significant line item for food and beverage manufacturers, but the current spike is sharpening the focus in a way we’ve rarely seen. From our work across the region — including the agri-food-focused SOGE Project pilot we’re running in Mongolia with the Mongolian Sustainable Finance Association — we’re seeing energy represent anywhere from 15-30% of operating costs in processing, refrigeration, packaging and cold-chain logistics.
What’s happening now isn’t just a cost shock; it’s exposing Scope 1 and 2 emissions vulnerabilities. Every extra dollar spent on fossil-based energy is also adding to your carbon footprint at a time when buyers, banks and regulators are demanding credible decarbonisation data. The manufacturers who treat this purely as a procurement problem will feel the squeeze hardest. Those who view it through an ESG lens are already turning it into a catalyst for efficiency gains, renewable procurement and, crucially, access to sustainability-linked financing to help accelerate sustainability adoption within the organisation.
Which food and beverage sectors do you think will be heavily impacted by this crisis? Why?
The most exposed segments are the ones with inherently energy-intensive processes: dairy (pasteurisation and refrigeration), beverages (water treatment, carbonation and bottling lines), baked goods and snacks (high-temperature ovens and frying), and frozen or chilled meat and seafood processing. Cold-chain logistics across all categories is another major pain point, since temperature-controlled transport is both costly and emissions-heavy.
These sectors feel the impact faster because energy is not just an overhead; it’s baked into the product itself. A dairy processor, for example, can’t simply switch off the chillers without compromising food safety. That’s why we’re seeing the early movers in these categories investing in energy mapping and Scope 3 visibility — because the crisis is forcing them to quantify exactly where their biggest emissions (and cost) leaks are.
What do you foresee to be the future for small and medium enterprises in Southeast Asia and how can they ensure their business viability amid this major challenge?
Southeast Asia’s F&B SMEs are incredibly resilient, but many are currently caught between rising input costs and buyers who are themselves under pressure to reduce their GHG emissions amidst rising regulations and expectations. If the energy crisis drags on, we’ll likely see a Darwinian shake-out: the businesses that survive and thrive will be those that actively recognise that climate risks are in fact, business risks, and can integrate sustainability fast enough in their day-to-day, as well as prove — with credible, verifiable data — that they are actively managing their environmental impact.
The good news is that digital tools have lowered the barrier dramatically. From our experience serving more than 1,000 companies across Asia and facilitating over 250 companies on sustainability-linked loans, SMEs that adopt simple, guided ESG platforms can generate their first credible GHG inventory and audit-ready Sustainability Report in weeks rather than months. That data and proper documentary proof of sustainability efforts then becomes their ticket to green financing, preferential procurement terms from larger buyers, and even price premiums in certain export markets. Viability in the coming years won’t be about being the cheapest; it will be about being the most transparent and efficient partner in the value chain.
Please name the 3 major challenges faced by these manufacturers in the medium to long term future should this energy crisis extend to more than 1 year?
If the energy crisis extends beyond a year, 3 major challenges will confront food and beverage manufacturers in the medium to long term. First, structural cost inflation and margin compression will become entrenched; even if energy prices eventually stabilise, the new higher baseline will remain, forcing companies to either absorb the hit or pass it on to customers, risking volume loss in an already price-sensitive market.
Second, accelerating regulatory and buyer pressure on Scope 1, 2 and especially Scope 3 emissions will compound the problem, as carbon taxes, increased focus on climate disclosures, and corporate emissions targets from multinational buyers tighten further; late adopters will face significantly higher compliance costs and the very real risk of being excluded from key supply chains.
Third, access to capital will become more challenging, with traditional lenders tightening criteria around climate risk while green and sustainability-linked financing grows rapidly. Meaning, companies without verifiable ESG performance data will simply find capital more expensive or, in some cases, unavailable altogether.
What do you propose to be solutions for the industry to overcome this major challenge?
The most practical and immediate solution is to treat this energy volatility not merely as a cost problem, but as a powerful ESG opportunity. Three concrete moves can help food and beverage manufacturers turn the crisis into a competitive advantage.
First, digitise energy and emissions visibility straight away; platforms such as ESGpedia enable companies to automate GHG emissions accounting using localised emission factors, and generate their audit-ready Sustainability Report aligned with ISSB, GRI, etc.. This is an important first step, because you cannot manage what you cannot measure.
Second, leverage sustainable finance as a hedge; sustainability-linked loans and green financing programmes, many of which we already support with more than 10 leading banks across ASEAN, reward verifiable energy-efficiency and decarbonisation targets with lower interest rates, effectively letting the savings fund the transition.
Third, collaborate up and down the value chain; by engaging suppliers digitally, as we have successfully done with multinational corporations like PSC Corporation, a homegrown consumer essentials provider behind the popular household brands including Royal Umbrella rice, Golden Peony rice, and more. As a fast-moving consumer goods (FMCG) manufacturer listed on the Singapore Exchange (SGX),, PSC Corporation has effectively embarked on their Scope 3 emissions calculation and tracking using the ESGpedia platform, achieving a comprehensive overview of their full value chain emissions and advancing on Scope 3 emissions reduction strategies.
In general, manufacturers can reduce Scope 3 risk collectively and strengthen their position with large corporations and financial institutions that now demand credible ESG data.
Manufacturers who emerge stronger from this crisis will be those who use the pressure of higher energy costs to accelerate their ESG maturity. In our view, this is not about green idealism, rather, about building a more resilient, competitive and investable business for the decade ahead.
The above Q&A editorial
is contributed by
Benjamin Soh,
Founder & Managing Director
of ESGpedia
