“The ESG Fund should not only cater to certain industries, but include all industries that need financing and some government assistance to start implementing their ESG practices right now,' says president Soh Thian Lai. — Bernama
PETALING JAYA: The Federation of Malaysian Manufacturers (FMM) has urged the government to establish a one-stop centre and offer an environmental, social and governance (ESG) fund of up to RM2bil to assist micro, small and medium enterprises (MSMEs) in implementing the ESG initiative.
President Tan Sri Soh Thian Lai said the proposed centre, which should fall under the purview of the Natural Resources, Environment and Climate Change Ministry, would provide an opportunity for MSMEs to obtain affordable financing and resources to kick-start their ESG journey.
“The ESG Fund should not only cater to certain industries, but include all industries that need financing and some government assistance to start implementing their ESG practices right now.
“We submitted our proposal to the previous government to establish the ESG Fund for the recent Budget 2023 presentation but it was not picked up.
“We will resubmit our proposal and hope that the new government will consider it,” he told Bernama on the sidelines of the FMM Entrepreneurship Conference (FEC) 2022 in Kuala Lumpur yesterday.
Soh noted that there was a need for greater adoption of ESG practices among MSMEs.
This was because investors and financial institutions were increasingly placing greater importance on ESG elements before deciding where to invest and provide access to financing.
“The ministry should also come up with a comprehensive policy by having a new task force to oversee the adoption of ESG among the MSMEs, while engaging the industry players to understand their challenges,” he added.
Meanwhile, Entrepreneur and Cooperatives Development Ministry secretary-general Datuk Suriani Ahmad, in her keynote address, said MSMEs will need to seriously address the ESG aspects in their business models.
This was to meet sustainability goals in order to remain relevant in the global value and supply chains.
She said the government, through Bank Negara, has established a RM1bil Low Carbon Transition Facility to support MSMEs in adopting sustainable and low carbon practices under Budget 2022.
“Eligible MSMEs will be able to obtain financing of up to RM10mil per company with a financing tenure of up to 10 years. As of July 6, 2022, 26 companies had applied for the facility with a total financing of RM11.71mil,” she said. Her speech was delivered by SME Corp Malaysia chief executive officer Rizal Nainy at the opening ceremony of FEC 2022.
The one-day conference, themed “Strengthening SMEs with ESG, going forward and expanding trade with Regional Comprehensive Economic Partnership”, focused on transitioning MSMEs towards a sustainable agenda, financing, market access and global value chain.
