10/09/2025

ESG WEDNESDAY | SEPT 10, 2025

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Green does not have to be gold

sustainable financing as of mid-2024, surpassing its RM80 billion goal set for 2025. RHB Bank disbursed RM23.8 billion and raised its target to RM50 billion by 2026. 7. ESG is becoming a driver of talent attraction and retention Employees now expect more than pay – they want purpose and meaning from their work. A global IBM study found that over 70% of employees say they’d be more likely to apply for or accept a job with a company they consider environmentally or socially responsible, and around 35% of those who switched jobs last year did so to work for such companies. 8. ESG readiness protects export competitiveness International buyers are raising the bar on climate standards. With the EU’s Carbon Border Adjustment Mechanism (CBAM) phasing in from 2026, Malaysian exporters will need to track and report their carbon footprint to avoid penalties. ESG compliance is becoming essential for protecting access to international markets. According to the Securities Commission, 75% of Malaysia’s exports to the EU could be affected, even though the EU accounts for just over 8 percent of total exports. 9. Greening supply chains saves millions in disruption Climate risks, labour shortages and tightening ESG standards are creating vulnerabilities across global supply chains. Companies that adopt sustainable procurement practices

returns Malaysian businesses now benefit from incentives like 100% investment tax allowance, soft loans under the Green Technology Financing Scheme, and the Net Energy Metering (NEM) programme. Local companies have cut electricity costs by nearly half, with some saving up to 75% after switching to rooftop solar. 5. Sustainability drives customer loyalty and willingness to pay Consumers are increasingly voting with their wallets. Businesses that can demonstrate environmental responsibility are more likely to attract and retain customers as well as command a price premium. According to the Malaysian Green Technology and Climate Change Corporation, 78% of Malaysian consumers consider a product’s environmental impact before making a purchase. And the business case doesn’t stop there. Beyond regulatory pressure, revenue growth, and energy savings, ESG also opens doors to financing, talent retention, and long term resilience. The following insights show how sustainability strategies are delivering measurable returns across different parts of the business. 6. Banks are unlocking ESG access through green finance Banks are increasing sustainable lending, making ESG investments more accessible for Malaysian businesses. CIMB Group had mobilised RM86.2 billion in sustainable finance. Maybank reported RM83.2 billion in is energy.

and build resilience into their supply chain operations are better able to avoid revenue loss and delivery delays. Malaysia’s economy is losing an estimated RM8.7 billion each year to supply chain disruptions. ESG-aligned businesses can mitigate these risks while maintaining competitiveness and customer trust. 10. ESG signals long-term business strength to investors Investors are prioritising companies with credible sustainability credentials, viewing them as more resilient, compliant, and better positioned for long-term growth. ESG performance is increasingly seen as a proxy for risk management and future-readiness. For SMEs seeking funding, this shift is especially relevant, ESG alignment isn’t just a moral imperative, it’s a competitive edge in attracting capital. In Malaysia, Sustainable and Responsible Investment (SRI) fund assets grew from RM7.05 billion in 2022 to RM7.7 billion in 2023, reflecting growing investor appetite for businesses that take ESG seriously. While this isn’t exponential growth, it marks a consistent upward trend in capital flowing into sustainability-focused investments – a signal SMEs can’t afford to ignore. This article is written by the Institute of Chartered Accountants in England and Wales (ICAEW) for the Malaysian market, it debunks the misconception that environmental, social and governance practices are a luxury only large corporations can afford.

Banking & Finance It was awarded a five-diamond rating under the Low Carbon Cities 2030 Challenge and recorded multiple entries in the Malaysia Book of Records, including as the country’s listed companies to adopt ESG disclosures, starting from financial year 2025. While most listed companies are not SMEs, this mandate will cascade through procurement chains, prompting thousands of SMEs to align with ESG standards if they wish to remain competitive vendors. Companies that act early will be better positioned to retain key contracts, access green capital, and maintain investor trust. 2. More SMEs are embracing ESG as a growth strategy A growing number of Malaysian SMEs are embracing ESG not just for compliance, but as a growth driver. For those already taking action, the commercial returns are starting to show. According to a recent study, 60% of SMEs have adopted ESG practices, up from just 28% two years ago. Among these adopters, 38% reported revenue growth exceeding 50%, driven by improved market access and customer demand. 3. But few have embedded it into core operations While awareness is rising, many Malaysian SMEs have yet to embed ESG into their core operations. A study found that only 19% of SMEs have adopted environmentally friendly production processes, and just 12% are involved in structured social responsibility programmes. This gap shows the opportunity for early movers to lead the transition. 4. Solar isn’t just green, it’s cost efficient One key area where ESG delivers fast buildings, and circular resource management. Its long-term roadmap targets a reduction of over 230,000 tonnes of carbon emissions by 2035. Commenting on the recognition, NCT group founder and group managing director, Datuk Sri Yap Ngan Choy said: “We are pleased to receive this recognition at MATA 2025, which further solidifies our commitment to shaping the future of industrial development through smart innovation and sustainable development. “NSIP was designed with that vision in mind, to create an ecosystem where technology, efficiency, and environmental care seamlessly intertwine. “We integrate smart and green elements into our development as part of our commitment to building a township aimed at achieving net zero carbon emissions by 2050, in line with the NSIP Low Carbon City Framework. Our goal is to create long-term impact through a community that contributes meaningfully to economic growth.” NSIP has earned widespread recognition across both industry and government.

E SG is often dismissed as something only large corpo rations can afford. But in Malaysia, where over 97% of all businesses are SMEs, that logic no longer holds, and in fact, may be holding them back. From family businesses to homegrown startups, or even regional brands, sustainabil ity is becoming a business necessity, not a luxury. The Institute of Chartered Accountants in England and Wales (ICAEW) plays a large part in translating this transition into tangible business terms. By quantifying savings and projecting returns, the organisation helps businesses future-proof operations – not through hype, but through hard numbers. ICAEW supports this shift by equipping businesses and finance professionals with the tools, training, and data-driven insights needed to quantify sustainability risks, measure returns, and embed ESG into long-term strategy. For Malaysian businesses, sustainability is not the cost – it is the payoff. Here are 10 data-backed insights, each paired with a clear business rationale, showing how ESG drives results at any scale. 1. ESG reporting rules will soon impact SMEs across the supply chain Bursa Malaysia now requires large, o 10 ESG facts every Malaysian business should know developer of the NCT Smart Industrial Park (NSIP), was conferred the Industry Excellence in Smart Industrial Solutions Award at the Malaysia Top Achievers 2025 (MATA 2025). Malaysia Top Achievers (MATA) 2025 celebrates outstanding organisations and individuals whose work contributes in elevating Malaysia’s socioeconomic growth, innovation excellence, and global competitiveness. NCT Land was awarded for its exemplary contribution to industrial development through the establishment of NSIP, Malaysia’s first certified Managed Industrial Park, which champions a low-carbon, digitally enabled industrial ecosystem. Located within Selangor’s Integrated Development Region in South Selangor (IDRISS), NSIP is anchored on ESG principles and built to support Industry 4.0 transformation. The park integrates smart digital infrastructure, including AI, IoT and predictive automation, alongside a comprehensive suite of sustainability initiatives such as solar-ready lots, smart mobility, green-certified

NCT Group earns recognition at Malaysia Top Achievers 2025 PETALING JAYA: Recognised for its leadership in driving sustainable and future-ready industrial development, NCT Land Sdn Bhd, the wholly owned subsidiary of NCT Group of Companies (NCT Group) and

NCT Group’s management and staff commemorate the company’s achievement at the Malaysia Top Achievers Awards 2025. First Managed Industrial Park and the Largest GreenRE Certified ESG Industrial Park. It also holds a GreenRE Developer of the Year at the Global Leadership Awards 2022 and received The Business Estate Award for Best Industrial Park Development at the StarProperty Real Estate Developer Awards 2024. CEO Sustainability Awards 2025. Launched in 2023, NSIP is targeted to hand over the first phase by end of the year. With NSIP raising the bar for smart integrated solutions, NCT Group remains committed to driving Malaysia’s industrial evolution while fostering long-term, inclusive growth for generations to come. Certification (Bronze) and was recently recognised with an ESG Pioneer Award for its impactful and disciplined sustainability governance. Additionally, NSIP was named The recognition follows a series of recent accolades for NCT Group, including its win at the Asia Pacific

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