Petaling Jaya: The environment, social and governance (ESG) scenario of Malaysia is prescribed for significant changes by 2030, operated by regulatory development, investor expectations and regional cooperation.
Benjamin Soh, Founder and Managing Director of ESGPDIA (Picture) Said, as stability reporting moves forward to compulsory requirements from voluntary commitments, businesses must integrate ESG ideas more deeply to remain competitive.
“A major milestone in the ESG Evolution of Malaysia is to adopt the International Stability Standards Board (ISSB)-the revelations of the stagnation.
Under the National Sustainability Reporting Framework (NSFR), large-list issuers will need to publish the ISSB-aligned stability report starting in 2025, with scope 3 emissions compulsory from 2027.
“The purpose of this change is to increase transparency and investors confidence, to attract Malaysian companies to attract global wealth that prefer stability,” he told Sunbez.
Beyond the regulatory compliance, he said that companies would face increasing investigation on their supply chains.
“In business, especially manufacturing, palm oil and energy-intensive industries, the ESG performance of suppliers will need to work hard. The strategy of sustainable sourcing and reduction in emissions will be necessary to maintain the market access, ”he said.
In addition, SOH stated that the expansion of permanent finance would also be a game-changer, in which banks and financial institutions will rapidly integrate ESG factors in risk assessment.
“This trend will lead to more availability of financial incentives for green bonds, stability loans and businesses with strong ESG commitments.
“The role of Malaysia as ASEAN President is expected to accelerate regional cooperation on climate finance, carbon markets and stability reporting.
He said, “As ASEAN economies move towards harmonious stability standards, companies working in Malaysia will need to align with local and regional ESG expectations, promote permanent investment from across the border,” he commented.
Despite these incidents, he highlighted that some Malaysian business still sees ESG compliance as a regular burden rather than a strategic opportunity.
“However, companies that embrace the initial stand to get the initial benefits to the ESG, including cost savings, enhanced investor trust and access to new markets,” he said.
He said that energy efficiency, supply chain optimization, and permanent resource management can make operating improvements by reducing carbon footprints.
Soh said, “Businesses managing ESG risks will be seen as more flexible and attractive to investors, banks and consumers, which prefer stability.”
He said that one of the biggest challenges in ESG implementation is a shortage of skilled professionals in Malaysia.
“Many businesses, especially SMEs, stability framework such as ISSB, task forces on climate-related financial revelations and struggle to interpret and implement the global reporting initiative.
“Climate risk evaluation, carbon accounting and ESG data analysis, without proper expertise, the companies incorrectly risk data, which lead to regulatory and iconic risks,” he said.
He said that the demand for ESG professionals with technical knowledge in greenhouse gas (GHG) emission calculation, life cycle assessment and impact measurement is increasing.
He said, “As the ESG compliance becomes a commercial requirement, the expertise and training programs will be important to equip the Malaysia’s workforce with the necessary expertise for the future,” he said.
Looking forward, Soh said, ESG’s hopes are increasing globally, Malaysian companies will have to transfer their perspectives from regulator compliance to long -term value creation.
“Business that take active steps to improve transparency, adapt resource usage and align with global stability standards will be best deployed to flourish in a rapid ESG-operated economy.
He said, “By 2030, the ESG landscape of Malaysia will be defined by more accountability, strong corporate stability commitments and a more efficient workforce, which establishes the platform for a more flexible and competitive business environment,” he said.
