Overview
Environmental, Social, and Governance (ESG) factors are transforming from voluntary disclosures into mandatory performance standards in Malaysia. Driven by climate urgency, stakeholder demands, and global economic shifts, ESG is now central to business transformation and competitiveness.
Key Trends
- Regulatory Mandates: Bursa Malaysia’s new sustainability reporting rules (IFRSaligned) make ESG disclosures mandatory for all listed companies—large-cap by
2025, others by 2027. - Beyond Reporting: Regulators and investors demand not just reports, but real ESG performance embedded in business operations.
- National Frameworks: MITI’s i-ESG Framework lays out a roadmap for SMEs, spanning capacity-building, financing, and market mechanisms through 2030.
- Investor & Consumer Pressure: ESG is increasingly tied to investment access, market eligibility (e.g. EU CBAM), and supply chain participation.
Pain Points
- Knowledge & Skill Gaps: Many firms lack trained ESG professionals, leading to tickboxcompliance rather than integration. Upskilling in areas like carbon accounting, DEI,and ESG investing is critical.
- Strategy & Execution Gaps: Companies often declare ESG ambitions (e.g. “net zero”)without clear roadmaps or internal accountability.
- Operational Disconnect: ESG remains siloed. Departments from procurement to marketing need tailored ESG training to embed it into daily operations.
Case Examples
- Maybank: Launched a Sustainable Product Framework, integrating ESG into banking services.
- TNB: Tracks 150+ ESG indicators as part of a sustainability-aligned energy transition.
- IWK: Recognized for public health–driven environmental management.
- PNB: Embeds ESG into investment evaluation and portfolio strategy.
Conclusion
Malaysia is entering a decisive phase in ESG transformation. Regulatory enforcement, market expectations, and global competitiveness are converging. Companies that act now—by embedding ESG into strategy, upskilling their teams, and operationalizing sustainability— stand to gain resilience, capital access, and reputational value.