Sustainability, often encompassed within the framework of environmental stewardship, social responsibility and governance excellence (ESG), has become a non-negotiable aspect of international trade. Therefore, local firms must be proactive in addressing environmental concerns to stay competitive globally, said Minister of Investment and International Trade (MITI), Tengku Datuk Seri Utama Zafrul Aziz.
According to the minister, his ministry has worked relentlessly to ensure that the nation’s key economic drivers, industrial manufacturing and export sectors, adopt sustainability measures to help Malaysia transition into a more sustainable economy that is climate-proof at present and into the future.
Under the banner of the National Industry Master Plan (NIMP), MITI is adopting a strategic approach to decarbonise the manufacturing sector in order to achieve the net-zero goal nationwide. Micro, Small and Medium Enterprises (MSMEs) within the sector are encouraged to join the i-ESG portal and integrate ESG principles into their operations. The step ensures that MSMEs can adopt best practices related to global sustainability standards to maintain their access to ESG-sensitive market.
i-ESG, referring to the National Industry ESG Framework, aims to accelerate the transition towards sustainable practices among manufacturing companies through four key pillars (standards, financing, capacity building, and market mechanisms) that are supported by 17 strategies, 50 deliverables, and six key enablers.
In order to achieve sustainability objectives to be at par with the global standards, local companies need financial support. For this reason, the need for just or equitable transition has been raised during many global forums such as the World Economic Forum and Nikkei Asia. It is extremely important for the developed or advanced countries to make good on their climate financing pledges to assist developing countries in building up climate risk management capacity.
In 2023, United Nations (UN) climate change conference announced a $30 billion fund for global climate solutions where $700 million was pledged to help lower-income countries. The climate summit, anchored by the 28th Conference of the Parties (COP28) to the UNFCCC (United States Convention on Climate Change Framework), reported that progress was too slow across all areas of climate action, from reducing greenhouse gas emission to strengthening resilience against the changing climate. Nations vulnerable to climate risk were short of finance and technological support. COP28 responded with a mandate to accelerate climate action across all areas by 2030, including a call on governments to speed up the transition away from fossil fuels to renewables such as wind and solar power in their next round of climate commitment.
On the local front, Malaysia has introduced four NIMP enablers to help local industries, particularly the SMEs, to adopt global climate standards. The first of these enablers mobilises the financing ecosystem that features supply chain financing for SMEs as well as financing for decarbonisation initiatives.
The Export-Import (EXIM) Bank has been recognised for its efforts in building the net-zero ecosystem through a series of financing and advisory programmes, aligning the country’s export sector with global expectation. On 24 September, the bank officially launched the Green Global Initiative, or Green Global Campaign, to commit RM1.5 billion to finance sustainability measures undertaken by the export sector.
