Industry leaders call for stronger climate action support

Fruitful talks: The ESG Budget 2024 roundtable discussion at Menara Star to field a wishlist from industry experts. — AZMAN GHANI/The Star

AS a signatory to the Paris Agreement, Malaysia has pledged to achieve net zero emissions by 2050.

However, by 2030, only seven years away, the country must unconditionally reduce carbon intensity against GDP by 45% as compared to 2005 levels.

As such, the pressure is on the Malaysian government and industries to decarbonise by that date.

The time has come to ask what the country’s stance is on its implementation of environmental, social and governance (ESG) principles.

With growing anticipation of the upcoming Budget 2024, Star Media Group has taken a proactive step in organising its first ESG roundtable discussion.

The initiative sought to evaluate issues, difficulties and suggestions while transitioning from routine reporting to actively engaging with stakeholders.

A key concern that kicked off the creation of this wishlist is the whopping 97% of small and medium-sized enterprises (SMEs) that make up the Malaysian industry.

This means large-scale ESG adoption across the country is dependent on this segment.

Yet, many SMEs in Malaysia still lack the urgency to implement ESG, which can add value to their businesses in the long run.

The StarESG editorial team aims to peel back the reasons for this apathy or ignorance.

Wide-ranging opinions and ideas on the subject were gathered and collated from companies of different sizes and structures through an SMG survey.

Businesses shared their challenges in implementing or integrating ESG into their company’s framework, as well as their “wishes” for Budget 2024 – incentives, policies and grants were requested to help propel the country’s ESG agenda forward.

Further verification was performed on the wishlist, and some had existing policies, indicating a general lack of awareness and the need for a centralised agency to conduct ESG education.

The results of the survey then formed the basis for the next step – the ESG roundtable discussion – which gathered key stakeholders from different fields for a fair exchange of opinions and ideas on the viability of policies, incentives and grants based on SMG’s survey findings.

A Budget 2024 Memorandum was then formulated and submitted to the Finance Ministry’s consideration.

Taking part in the discussion were industry representatives from banking, logistics, agriculture, aviation, retail, manufacturing, electrical and electronics, solar PV, as well as various chambers of commerce.

One of the many intriguing points brought up in the discussion is the expense associated with individual businesses switching to renewable energy.

Tied to that is also the adoption of electric vehicles in the commercial sector.

The primary challenge in transitioning to clean energy sources is the substantial upfront investment required for installation and maintenance, all of which are considered burdensome for SMEs recovering from the pandemic.

The roundtable participants also addressed SME’s sluggish adoption of ESG which, as mentioned, will impact Malaysia’s aim of achieving 45% carbon reduction by 2030.

The representatives, some of whom are key members of industrial associations, shared that SMEs affiliated with them view ESG as a necessary expense due to widespread compliance as opposed to an investment that adds value to their brand and company.

There were also recommendations for the government to appoint or establish a central body to champion the ESG agenda, one that provides education and information to companies, as well as streamline all incentives and grants from varying sectors into a single repository for all to access.

A full analysis of the ESG Budget roundtable discussion will be featured in this month’s StarESG pullout tomorrow.

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