SHAH ALAM: MOST small and medium enterprises (SMEs) in Selangor face challenges to comply with Environment, Social and Governance (ESG) practices due to various factors.
State investment, trade and mobility committee chairman Ng Sze Han said that these included the lack of disclosure about the importance of ESG, and how to absorb ESG practices internally within the business administration.
He was responding to a question by Chua Wei Kiat (PH-Rawang) at the Selangor State Assembly sitting today who asked what challenges were faced by SMEs in Selangor to comply with ESG principles.
Asked how the Selangor government intends to help SMEs comply with international ESG practices, Ng said the state, through the Selangor Information Technology & Digital Economy Corporation (Sidec), had taken proactive steps to help them through engagement programmes and discourse related to ESG.
This included organising an ESG-related forum held at the Selangor Smart City Conference & Digital Economy Convention (SDEC) 2023 last October, which was attended by over 350 participants to educate SMEs about the importance of and the benefits of complying with ESG practices.
Among the topics discussed were Responsible AI, AI in Healthcare, AI-Driven Mobility, Biotech for a Sustainable Future, and How to Invest for a Sustainable Future.
“Through this forum, SMEs were exposed to ways to integrate ESG principles into business operations, as well understand long-term profitability and social responsibility,” Ng said.
He added that Sidec also organised annual programmes such as the Selangor Accelerator Programme (SAP) and Selangor E-Commerce Xccelerator (ECX) which provides mentorship and workshops to entrepreneurs that include exposure to ESG aspects to SMEs.
Chua also asked if ESG compliance could lead SMEs facing losses, Ng said on the contrary, ESG practices were designed to help organisations be more viable and competitive.
“On the other hand, SMEs are more at risk of incurring losses if they do not start emphasising ESG practices. Among the risks are regulatory, financial and investment potential, operational effectiveness, innovation and company growth, and the loss of reputation at the local and global levels,” explained Ng.
To a question by Michelle Ng (PH-Subang Jaya) if the Selangor government would offer tax incentives to SMEs who complied with ESG practices, Ng said that tax incentives do not come under state government.
However, he added that Selangor would suggest to the Federal Government to consider offering tax incentives to SMEs who follow ESG practices.
