Tengku Zafrul: iESG Framework can lead to global US$12t market opportunities
02 Oct 2023
The newly launched Industry Environmental, Social, and Governance (iESG) Framework is set to help Malaysia achieve its sustainability and net zero aspiration goals within seven years or less.
It will also potentially lead the way to tap into a US$12-trillion (US$1=RM4.699) ESG-focused global market.
Investment, Trade and Industry (MITI) Minister Tengku Datuk Seri Zafrul Abdul Aziz (pix) said the framework begins with Phase 1.0 from 2024 to 2026, followed by Phase 2.0 from 2027 to 2030.
“MITI strongly believes that the transition towards sustainability and meeting Malaysia’s aspiration to become net zero by 2050 will bring numerous benefits in terms of sustainable growth and job creation.
“The commitment to ESG principles in Malaysia’s national development agenda also reflects our recognition that embracing sustainability is not just something we must do to safeguard growth and profits, but most importantly, it is also the right, moral thing to do for the sake of our people and planet,” he said.
Tengku Zafrul’s speech was read by Deputy Investment, Trade and Industry Minister Liew Chin Tong at i-ESG Phase 1.0 launch here today.
As a signatory to the 2015 Paris Agreement, Malaysia is committed to reducing greenhouse gases by 45 per cent in 2030 and becoming carbon neutral (net zero emission) by 2050.
The i-ESG Framework is a key enabler for the Push for Net Zero mission, one of four missions of the recently launched New Industrial Master Plan 2030 (NIMP 2030).
The i-ESG’s overarching objective is to accelerate the transition towards sustainable practices among manufacturing companies.
There are four pillars — standards, financing, capacity building and market mechanism — as well as 17 strategies, 50 deliverables and six key enablers. The framework aims to provide guidance and drive the manufacturing sector, especially for micro, small, and medium enterprises (MSMEs) towards ESG compliance.
“While the NIMP 2030 sets out the ‘what’ of ESG, this i- ESG Framework presents the ‘how’. It serves as a roadmap for businesses to integrate ESG considerations into their operations, and is a tool for regulators to ensure compliance and accountability,” he said.
Tengku Zafrul said the i-ESG Phase 1.0 lays the groundwork and fosters the development of a robust ecosystem to help ensure companies’ readiness to meet the more rigorous demands of Phase 2.0.
He noted that Phase 1.0 would centre on the principle of “Just Transition” because local businesses, particularly the MSMEs, cannot be held immediately accountable to standards that companies in developed markets have had a head start for at least a decade or longer.
This also ensures that no one is left behind, reflecting the Madani Economy’s commitment to inclusivity, particularly in the pursuit of ESG objectives, he added.
MSMEs in the manufacturing sector must not be left to fend for themselves in adopting and embracing sustainable practices because they may not have the capacity or technical knowledge, he said.
Almost 98 per cent of Malaysia’s business establishments are MSMEs, employing 7.3 million and they must be supported, he said, adding that MSMEs in the manufacturing sector contribute about 8.0 per cent to gross domestic product and 9.0 per cent to exports.
Source: Bernama
