ENTREPRENEURS are nothing short of superhuman. Akin to parenthood, owners of micro, small, and medium enterprises (MSMEs) and small and medium enterprises (SMEs) juggle numerous responsibilities each day - from managing customers and cash flow to overseeing operations and inventory.
Adding climate goals to an already packed agenda can understandably feel daunting, often pushed to the bottom of the list when one is striving to keep the business afloat.
However, sustainability is undeniably a smart business strategy, and it may not be as complicated as it’s often made out to be. Decarbonisation is one of the key strategies that businesses can adopt in their sustainability journey, offering both environmental benefits and potential cost savings.
A brief breakdown
In simple terms, decarbonisation means reducing the amount of carbon dioxide (CO2) released into the atmosphere. This can be achieved in several ways - like switching to renewable energy, improving energy efficiency, or adopting technologies that capture and store carbon.
Malaysia’s National Energy Roadmap (NETR) sets ambitious national targets: a 31% cut in emissions by 2025, 40% by 2035, and an impressive 70% by 2050—highlighting the country’s firm commitment to climate action.
The long-term goal is to reach net zero—where the carbon emitted is balanced by the carbon removed. Businesses are well-placed to contribute to the nation’s goals through setting corporate decarbonisation targets. This involves practical steps to shrink a company’s carbon footprint—whether through greener energy, more efficient operations, or designing more sustainable products and services.
Some businesses also turn to carbon offsetting—investing in projects that reduce emissions elsewhere, such as tree planting, one of the most common nature-based offsets. While helpful, offsets should never replace real efforts to cut emissions. True corporate decarbonisation also means looking beyond internal operations to consider emissions across the full supply chain.
What’s in it for businesses?
Cutting emissions helps the planet while lowering costs. Many companies have seen up to a 30% increase in revenue thanks to energy savings and greater efficiency. Implementing decarbonisation plans that are verified via external assurance also helps build trust and avoid the pitfalls of greenwashing.
With carbon taxes and emissions trading schemes on the rise, compliance may become a new challenge for businesses to avoid potential costs and penalties. The EU, for example, has seen a nearly 500% increase in carbon taxes between 2018 and 2023. Closer to home, Singapore and Indonesia are examples of jurisdictions that have introduced carbon taxes at an initial stage.
Internally, decarbonisation can improve employee engagement. Companies that take climate action often see higher productivity (up to 13%) and lower staff turnover (by as much as 50%) by increasing employee trust in company policies.
Clear action on emissions also strengthens a business’s sustainability disclosures and transparency, which appeals to customers and investors alike.
According to Euromonitor, 54% of global consumers believe ethical purchases make a real difference. This means demand for sustainable products is only growing.
Sustainability also drives innovation by reshaping how energy, materials, water and waste are used in product and process design—often revealing opportunities for smarter, more efficient ways of working.
Jumpstarting strategies
The decarbonisation journey begins with gathering data—from energy use and travel to waste. This involves calculating the organisation’s carbon footprint and provides a clear starting point for action.
Next comes setting measurable targets aligned with global climate goals, such as limiting global warming to 1.5°C. Establishing a baseline year is key to tracking progress and setting credible science-based targets.
For example, OCBC Bank (Malaysia) Bhd has introduced science-based decarbonisation targets for its financing portfolios in certain high-emission sectors. The bank is also phasing out project financing for new upstream oil and gas developments approved after 2021 and aims to cut absolute emissions in the sector by 35% by 2030.
Taking action means turning targets into real results. This involves identifying emissions hotspots, securing support from internal teams, and implementing practical, tailored solutions. Carbon offsetting can play a supporting role, but direct reductions must remain the priority.
Monitoring progress and reporting it transparently builds trust and accountability. Regular reviews help identify what’s working and where improvements can be made. Using the right technologies, and engaging employees, partners, and investors, can help keep the momentum going.
A little help goes a long way
With the right support, starting a decarbonisation journey can be simpler and more rewarding than expected. A practical entry point for SMEs is OCBC Bank’s SME Energy Assessment (SMEEA) tool.
This complementary tool helps businesses identify energy inefficiencies, reduce carbon emissions, and boost operational performance—while staying aligned with environmental standards.
SMEEA also introduces key concepts like Scope 1, 2, and 3 emissions, and offers tailored recommendations that can lead to cost savings and improved competitiveness. The results can be shared with stakeholders to build trust and collaboration.
As a proud member of the UN Global Compact Network Malaysia and Brunei, OCBC Malaysia supports efforts on follow-up guidance, resources, and access to green financing—empowering SMEs to make meaningful progress towards sustainability and long-term resilience.
The bank’s wider commitment to responsible business is also reflected in its ongoing support as the main sponsor of the Star Media Group ESG Positive Impact Awards for three years running.
For businesses ready to take action, UNGC’s MY Climate Action Guide is a great place to begin. It’s packed with practical tools and resources to help businesses plan and make real progress on the road to net zero.
Mangrove trees are vital in combating climate change, and a collaboration in Tebuk Mendeleng, Sabak Bernam, exemplifies this effort. OCBC Bank, alongside the Global Environment Centre (GEC) and Pertubuhan Sahabat Hutan Bakau Kampung Dato’ Hormat (PSHBKDH), has planted 9,000 mangrove trees across 4.5 hectares.
From 2022 to 2025, OCBC will monitor and nurture these trees to ensure their long-term survival. This initiative addresses key ESG criteria:
> Environmental: Mangroves sequester four times more carbon than rainforests, aiding in greenhouse gas reduction and ecosystem revival.
> Social: Local villagers, particularly from B40 households, benefit through income and skills gained from mangrove nurseries and rehabilitation.
> Governance: Continuous care demonstrates a commitment to sustainability.
OCBC Bank’s reforestation projects aim to absorb over 111 million kg of CO2, highlighting the importance of healing the present for a sustainable future.
As part of its ongoing quest to spread the word about sustainability, the bank organises an annual mass cycling event called OCBC Cycle Kuala Lumpur, which seeks to be more and more environmentally-friendly each year.
This is done by controlling the use of plastics and by instilling greater respect for the preservation of the surroundings while promoting the recycling agenda.
It has also been involved in KL Car-Free Morning and JB Car-Free Morning toward the same end.
