JOHOR BARU: Manufacturers are having a tough time implementing green initiatives to meet international environmental, social and governance (ESG) standards, says the South Johor Foundry and Engineering Industries Association.
Its president Lim Kok Kiong said manufacturers – especially those involved in export and import – are these days required to meet standards set by international companies, but they are unsure about where to start.
“ESG compliance is on the rise globally and we have to follow suit in order to remain competitive. However, there is a lack of guidelines from the government.
“Budget 2025, tabled in Parliament on Oct 18, also did not provide clear and specific guidelines on ESG. We also hope to see subsidies and grants for the manufacturing industry to encourage ESG compliance,” he said when interviewed.
Lim added that the lack of guidance has left the industry, especially small and medium enterprises (SMEs), feeling “restrained” by global ESG requirements.
“We feel like we are in a tough spot as we have to meet international standards for imports and exports.
“Many companies in foreign countries like China usually require a clear ESG framework from the businesses they deal with,” he said, adding that many association members have voiced similar concerns.
He said local companies were worried that their livelihood may be threatened if they do not comply with ESG standards, but at the same time, they lacked the resources to invest in green technology, so government guidance was much needed.
“This will be in line with the government’s plans to introduce a carbon tax on the iron and steel as well as energy industries by 2026.
“Proper guidelines and a strong policy rollout will encourage more manufacturers to invest in green technology and implement energy-saving production methods as many are still using traditional methods that are more energy consuming,” said Lim.
During Prime Minister Datuk Seri Anwar Ibrahim’s tabling of Budget 2025, he said a carbon tax will be imposed on the iron and steel, and energy industries by 2026 to encourage the adoption of low-carbon technologies.
The proceeds will be used to fund green research and technology programmes.
