The Malaysian government has announced that it will introduce a framework on environmental, social, and corporate governance (ESG) standards by the end of 2023.
The Malaysian government has announced that it will introduce a framework on environmental, social, and corporate governance (ESG) standards by the end of 2023. The framework is part of the government’s efforts to promote sustainable development and attract investment.
ESG standards are a set of criteria that companies can use to measure their environmental, social, and governance performance. They are increasingly being used by investors to assess the risk and potential return of investments.
The Malaysian government’s ESG framework will be based on international standards, such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB). It will cover a wide range of issues, including climate change, human rights, and labor practices.
The government hopes that the framework will help companies to improve their ESG performance and attract investment from socially responsible investors. It will also help to raise awareness of ESG issues among Malaysian businesses and consumers.
Experts have welcomed the launch of the ESG framework. They believe that it will help companies to improve their ESG performance and attract investment from socially responsible investors. They also believe that the framework will help to raise awareness of ESG issues among Malaysian businesses and consumers.
Dr. Nursaidatul Akmar Mazelan, Green Project Management (GPM) Ambassador, believes that the launch of the ESG framework is a positive step for Malaysia. It shows that the government is committed to promoting sustainable development and attracting investment. The framework will help companies to improve their ESG performance and make Malaysia a more attractive destination for investment.
The launch of the ESG framework is a positive step for Malaysia. It shows that the government is committed to promoting sustainable development and attracting investment. The framework will help companies to improve their ESG performance and make Malaysia a more attractive destination for investment.
In addition to the government’s efforts, there are a number of other initiatives underway in Malaysia to promote ESG.
The Securities Commission Malaysia has updated the Malaysian Code on Corporate Governance to emphasize the importance of ESG. The Institute of Corporate Directors Malaysia (ICDM) has also launched a number of initiatives to promote ESG among Malaysian companies.
Malaysia’s readiness on ESG framework
In addition to the government’s efforts, there is a growing focus on ESG among Malaysian businesses. A survey by PwC Malaysia in 2021 found that 90 percent of Malaysian banks have assigned a department to operationalize ESG.
Despite these positive developments, there are still some challenges that Malaysia needs to address in order to become a more ESG-ready country. These challenges include:
- The need for more training and education on ESG.
- The need for more data and information on ESG issues.
- The need for more collaboration between government, businesses, and civil society.
Some of the key areas where Malaysia can improve its ESG readiness are:
Data and information
Malaysia needs to collect more data and information on ESG issues. This will help businesses to make informed decisions about ESG and will help investors to assess the risk and potential return of investments.
Training and education
Malaysia needs to provide more training and education on ESG. This will help businesses to understand the importance of ESG and how to implement ESG practices.
Collaboration
Malaysia needs to increase collaboration between government, businesses, and civil society. This will help to develop a more comprehensive and effective ESG framework.
The International Trade and Industry Minister Tengku Zafrul Abdul Aziz said at an occasion, “A lot of our export markets are asking exporters to be ESG-compliant, so we need to prepare our companies, especially our SMEs to transition to be more ESG-compliant.”
Advantages of launching ESG framework in Malaysia
The advantages of launching the ESG framework in Malaysia are numerous. By doing so, Malaysia can attract investment, improve corporate governance, reduce risk, boost innovation, and improve its public image.
Attracting investment
ESG-focused investors are increasingly looking to invest in companies that are committed to sustainability. By launching an ESG framework, Malaysia can signal to these investors that it is a country that is serious about sustainability.
The ESG framework could help Malaysia attract investment from socially responsible investors, such as pension funds and insurance companies. These investors are increasingly looking to invest in companies that are committed to sustainability.
Improving corporate governance
ESG standards can help to improve corporate governance by ensuring that companies are transparent about their environmental, social, and governance performance. This can help to protect investors and stakeholders from risk.
Reducing risk
ESG standards can help to reduce risk by identifying and mitigating potential risks to companies’ environmental, social, and governance performance. This can help to protect companies’ reputations and financial performance.
Boosting innovation
ESG standards can help to boost innovation by encouraging companies to develop new products and services that are more sustainable. This can create new jobs and economic opportunities.
Improving public image
ESG standards can help to improve Malaysia’s public image by demonstrating that the country is committed to sustainability. This can attract tourists and businesses to Malaysia.
Conclusion
Malaysia is making progress in its readiness for the ESG framework. However, there are still some challenges that need to be addressed in order to be fully ready for the transition to a more sustainable economy.
The growing focus on ESG in Malaysia is a positive development. It shows that businesses and investors are increasingly aware of the importance of sustainability. The government’s ESG framework will help to accelerate the transition to a more sustainable economy in Malaysia.