KUALA LUMPUR: Small and medium enterprises (SMEs) need to swiftly integrate environmental, social, and governance (ESG) practices into their business operations to maintain their competitiveness in the market and ensure long-term sustainable advantages, Bank Negara Malaysia (BNM) said.
The central bank noted that the global enforcement of ESG regulations by certain countries, such as those in the European Union, has had an impact on Malaysia’s direct and indirect exporters involved in the supply chain.
Thus, this may affect the way SMEs do business in the future, especially when demand for suppliers to comply with ESG practices continues to rise, BNM said during a media workshop "Sustainability in Financial Sector: Greening Finance and Financing Green” at Sasana Kijang here today.
"Besides, survivability would be one of the significant reasons for SMEs to integrate ESG in their business.
"There will be some costs and investments for SMEs to undertake transition measures but it will provide long-term benefits for the business,” BNM said.
The central bank further explained that, for example, a company can reduce its costs of business operation by using energy efficiency initiatives.
BNM added that it will continue to facilitate SMEs in their transition to ESG through its related funds, such as the low carbon transition facility and high tech and green facility. - Bernama
