14/01/2026

ESG WEDNESDAY | JAN 14, 2026

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More firms set to adopt standards

KUALA LUMPUR: The outlook for the adoption of environmental, social and governance (ESG) standards by companies in Malaysia looks highly positive this year due largely to practical policy initiatives unveiled last year, such as the carbon tax, increased ESG reporting and scaling up sustainability initiatives. The carbon tax would encourage firms to reduce carbon emissions, a move that would advance Malaysia’s ESG commitment further. “The outlook for ESG adoption among Malaysian companies across all sectors in 2026 is highly positive,” said ThinkPlus Group of Companies CEO , Dr Norsaidatul Akmar Mazelan. “These policies strongly incentivise companies to integrate ESG into their strategies for compliance, competitiveness and access to financing,” she said when reviewing ESG initiatives that are transforming the business climate in the country today. “Malaysia’s phased ESG adoption framework – starting with the ‘just transition’ phase (2024-2026) and moving into the o Positive outlook due to carbon tax, increased reporting and sustainability initiatives introduced last year This dual inclusion marks a significant milestone in the group’s sustainability journey and serves as a strong external endorsement of its Environmental, Social, and Governance (ESG) practices. The inclusion follows the strategic establishment of a dedicated Group Sustainability Unit in 2021 and builds on prior recognition, including The Edge Malaysia ESG Silver Award for Most Improved Performance in 2022. “Our inclusion in these respected indices is a powerful validation of our strategic commitment to ESG throughout the group,” said Mathias Varming, head of group risk and sustainability management at DNeX. “It transforms our sustainability roadmap from an internal plan into a globally recognised benchmark. “This will act as a catalyst to accelerate our initiatives and enhance long-term value creation for all stakeholders.” The dual indices inclusion delivers immediate strategic advantages to the group: 0 Enhanced Market Profile: Increases DNeX’s visibility to global investors seeking responsibly managed companies. 0 Access to ESG Capital: Positions DNeX to attract investment from the growing pool of ESG focused funds, which manage an estimated US$ 3.7 trillion in assets globally. 0 Broader Investor Base: Ensures automatic inclusion in funds that track the F4GBM and F4GBMS indices, promoting greater liquidity and a more diverse shareholder register. DNeX remains committed to advancing its sustainability agenda, using the FTSE4Good framework as a guide for continuous improvement in corporate performance and stewardship.

‘accelerate ESG practices’ phase (2027-2030) – provides a clear roadmap that encourages companies to improve ESG disclosures and strengthen sustainable operations. “This foundation is supported by increasing regulatory clarity, technological advancements and stakeholder demand for accountability in ESG performance, positioning 2026 as a pivotal year for scaling sustainability efforts,” she added. 0 Malaysia moves towards mandatory ESG There is no doubt that Malaysia is taking the ESG agenda seriously, both to strengthen national competitiveness and safeguard national sustainability. The carbon tax, an important legislation effective in 2026 after being unveiled in Budget 2025, will initially apply to high-emission sectors such as energy, steel and heavy industries as part of the nation’s transition towards a low-carbon economy. Malaysia will also roll out the National Environmental, Social and Governance Strategic Plan (NESP) soon, an initiative designed to guide businesses towards adopting sustainable and ESG-compliant practices, which industry players are eager to leverage the plan to elevate their businesses. 0 ESG and sustainability milestones in 2025 This year was undoubtedly a turning point, with more small and medium enterprises (SMEs) shifting towards sustainable practices through support from banks, corporations and non

Benua Hijau wins environmental sustainability award KUALA LUMPUR: Benua Hijau Sdn Bhd was awarded the Environmental Sustainability Award - Biodiversity and Natural Resources Protection at the ESG PLUS Awards 2025 recently. In a statement, the company said the recognition reflects its work in responsible land stewardship, wildlife protection programmes, habitat restoration initiatives and sustainable resource management practices. Winning the Environmental Sustainability Award marks a milestone in its work on ecological protection and sustainable development, it added. “We are honoured to receive the Environmental Sustainability Award. Protecting our natural heritage is not just a commitment. It is our responsibility to future generations. “This recognition encourages us to continue expanding our conservation efforts and championing biodiversity protection across Malaysia,” Benua Hijau, a Malaysian company committed to environmental sustainability, biodiversity protection and responsible resource management, said. It further said the company has implemented science-based conservation strategies, community-driven environmental education and collaborative projects with local authorities, non-governmental bodies (NGOs) and universities in preserving biodiversity and protecting natural resources Its key initiatives include Melaleuca cajuputi (Pokok Gelam) natural habitat restoration in the Setiu Wetlands in Terengganu; reforestation and rehabilitation of degraded forest areas; protection of endangered flora and fauna; sustainable land-use and resource management practices; and community education and environmental awareness programmes. These efforts align with Malaysia’s national biodiversity framework and global sustainability goals, the company added. – Bernama Malaysia also collaborated with Asean peers to launch the Asean Centre of Excellence for micro, small and medium enterprises in green transition (MEGA) in October, alongside the Asean STI Ecosystem Foresight 2035 report and Asean in 2025: Shaping an Inclusive and Sustainable Future . – Bernama transition, reinforcing the global standing of its NSRF. In another development, effective Dec 1, 2025, the government implemented a new renewable energy (RE) initiative leveraging building rooftops under the Solar Accelerated Transition Action Programme (Solar ATAP). A continuation of the Net Energy Metering initiative, which ended on June 30, 2025, Solar ATAP is expected to boost distributed generation, giving consumers more rooftop options, supporting Malaysia’s goal of 70% RE in electricity supply by 2050. 0 Promoting ESG adoption in Asean As Asean chair in 2025, Malaysia has acted as a bridge to promote ESG adoption across sectors and businesses in the region. Key efforts include the launch of the Asean Simplified ESG Disclosure Guide (ASEDG) for SMEs in supply chains in April, developed under the Asen Capital Markets Forum led by the Securities Commission Malaysia. The framework helps SMEs implement practical ESG reporting aligned with international and regional standards, meeting growing expectations from investors, buyers and financial institutions.

governmental organisations (NGOs) offering financing, advisory services and practical assistance for ESG adoption. Alliance Bank’s ESG Report 2025 indicates a sharp rise in ESG awareness and adoption among Malaysian SMEs, with awareness climbing from 14% in 2023 to 80%in 2025, while adoption increased from 28% to 60% over the same period. These developments reflect SMEs’ growing awareness of global sustainability demands in supply chains, with many viewing ESG adoption as a strategic move to expand market access amid current economic challenges. Another key initiative this year is the government’s push, through the Securities Commission Malaysia and Bursa Malaysia, to require listed companies to comply with the International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards (IFRS S1 and S2) in their ESG reporting. Introduced by the International Sustainability Standards Board (ISSB), the standards provide a globally recognised framework for sustainability and climate related disclosures, aligned with Malaysia’s National Sustainability Reporting Framework (NSRF) to enhance transparency and consistency in local capital markets. Under a phased rollout, large Main Market listed issuers must comply from 2025, other Main Market issuers in 2026, and ACE Market issuers and large non-listed companies in 2027. Malaysia is the only Asean jurisdiction to adopt the ISSB standards with a limited

DNeX hits milestone with entry into two Bursa indices CYBERJAYA: Dagang NeXchange Bhd (DNeX) has been included in both the FTSE4Good Bursa Malaysia (F4GBM) Index and the FTSE4Good Bursa Malaysia Shariah (F4GBMS) Index, effective Dec 22, 2025.

A view of the DNeX headquarters.

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