Malaysia Reaffirms Sustainability As Key To Economic Agenda And ASEAN Chairmanship

Samuel Chua

21st January 2025 - 3 min read

Malaysia’s commitment to sustainability will remain a cornerstone of its economic agenda, said Nik Nazmi Nik Ahmad, Minister of Natural Resources and Environmental Sustainability. Speaking at the SME ESG START Symposium 2025, he emphasised that sustainability is central to the country’s strategies, particularly as Malaysia takes on the ASEAN Chairmanship this year.

“Sustainability can only take root if it takes cognisance of our nation and region’s economic realities,” he said, underlining the vital role of small and medium enterprises (SMEs) in achieving sustainable growth. “SMEs are the backbone of Malaysia’s economy, comprising 97.2% of business establishments, contributing 37.4% to our GDP, and accounting for 48%of employment. Their sustainable growth is essential for our economic resilience and climate goals.”

The warning comes as Alliance Bank’s newly launched ESG 2.0 Report highlights significant progress in ESG awareness among Malaysian SMEs, with awareness rising from 14% in 2022 to 80% in 2024. However, Nik Nazmi cautioned that while awareness is improving, many SMEs still struggle to meet international sustainability standards, which could hinder their ability to compete globally.

“Initiatives such as the European Union’s Corporate Sustainability Reporting Directive (CSRD) are raising the bar, requiring enhanced ESG disclosures from companies and their suppliers. Failure to comply could limit market access, posing significant challenges for Malaysian SMEs that aim to compete globally,” he said.

The ESG 2.0 Report, unveiled at the symposium, provides insights into the progress SMEs are making in their sustainability journeys. It identifies cost savings, market demand, and innovation as key drivers for ESG adoption and highlights the tangible benefits businesses have experienced. The report also notes that SMEs integrating ESG practices reported increased revenue and improved productivity, with 38% seeing revenue growth of more than 50%.

Kellee Kam, Group CEO of Alliance Bank, said the report underscores the bank’s commitment to empowering SMEs on their ESG journey. “As we continue to champion ESG adoption, we are committed to empowering Malaysian SMEs through our 3As approach, namely Advocacy, Advice, and Answers, helping them integrate ESG practices as key drivers of long-term resilience and success,” he said.

Produced in collaboration with Monash University Malaysia, Zurich Malaysia, and other partners, the report also highlights the challenges SMEs face, including the complexity of ESG requirements and limited resources. Kam added that Alliance Bank is dedicated to providing tailored financial solutions and guidance to support SMEs in navigating ESG demands and remaining competitive in evolving markets.

Nik Nazmi also emphasised the importance of collective action to overcome these hurdles and advance sustainability. “The time to act is now—to scale sustainability through supply chains, to strengthen our commitment to ESG principles, and to position Malaysia as a leader in sustainable development within the region,” he said.

0 0 votes

Article Rating