Navigating the Latest ESG News: What SMEs in Manufacturing Need to Know
Staying informed about the latest ESG news is crucial for small and medium-sized enterprises (SMEs) in the manufacturing sector. With the increasing emphasis on ESG reporting as part of annual returns, particularly under Malaysia's new, more stringent ESG regulations, SMEs must navigate this complex terrain to maintain compliance and promote sustainable business practices.
Here's a roundup of some of the ESG developments that happened during August, both globally and locally, to help you stay in the loop.
Local ESG News
Forward Faster Louder!
The UN Global Compact Network Malaysia & Brunei (UNGCMYB) and Astro Malaysia launched the "Forward Faster Louder" program to amplify sustainability efforts in Malaysia. This initiative, part of the broader "Forward Faster" program, uses Astro's platform to promote impactful ESG narratives through real-life stories.
The program aims to inspire action in critical areas like climate action, gender equality, and water resilience. Astro is committing to increasing ESG-related content. The collaboration seeks to raise awareness and drive sustainable business practices across the region.
The UN Global Compact Network Malaysia and Brunei also announced that nominations are open for its renamed Forward Faster Sustainability Awards. The awards recognise member companies' ongoing efforts to integrate sustainability into their business strategies. The program aims to inspire other businesses to adopt sustainable practices, emphasising the importance of collective action in driving significant environmental, social, and governance (ESG) advancements. The awards highlight the potential for meaningful progress in ecosystem healing by encouraging even small steps.
Carbon Law Dispute in Sarawak and Sabah
A federal plan to regulate carbon dioxide storage in Malaysia faces resistance from Sarawak and Sabah. These states seek greater control over carbon storage projects and aim for economic independence from Peninsular Malaysia. Sarawak, in particular, insists that such projects should be governed by state law, citing jurisdiction over state land and offshore resources.
This opposition complicates federal goals to position Malaysia as a carbon capture and storage hub, potentially adding economic value over the next three decades. For instance, Sarawak's carbon trading initiative is on hold until the Transboundary Transportation of Carbon Law is passed, anticipated in November.
This law is crucial for regulating carbon export, as Sarawak currently lacks specific legislation for this emerging market, unlike its well-established timber export laws. The state is working with the World Bank to set carbon prices and is carefully selecting consultants for these new projects.
Sustainable Competition
The Prime Minister's Hibiscus Award for 2024-2025 has been relaunched. This prestigious award, supported by various governmental and environmental bodies, recognises Malaysian companies for their environmental sustainability efforts. It encourages businesses to adopt eco-friendly practices and highlights their contributions to environmental preservation.
The award program, which started in 1996, aims to foster greater environmental responsibility across industries. Winners serve as role models for sustainable practices.
Global ESG Conference Sets Out Goals
The 7th Global Conference on ESG Management & Sustainability, organised by the Center for Environmental and Social Governance Studies (CESGS) at Universitas Airlangga, highlighted the critical role of managing social aspects within a company's Environmental, Social, and Governance (ESG) strategy.
Key points from the conference include:
- Broader Scope of ESG: ESG should encompass more than environmental concerns; it should also focus on creating inclusive and sustainable social impacts.
- Human Touch in ESG: Effective ESG strategies must integrate social justice, diversity, inclusiveness, and community involvement.
- Communication and Cultural Understanding: Companies need to emphasise communication and local cultural understanding to effectively manage social aspects in diverse and complex contexts like Indonesia.
- Benefits of Good Social Management: Proper management of social aspects can enhance a company's reputation and operational conditions by obtaining a social licence to operate.
The conference, held from August 6-8, 2024, in Surabaya, brought together experts from various countries, reflecting growing awareness and integration of ESG principles in business strategies across the Asian region.
ESG Positive Impact Award Winners Announced
The 2nd annual ESG Positive Impact Awards (PIA) celebrated 64 companies and individuals recognised as ESG (Environmental, Social, and Governance) trailblazers. These honorees are acknowledged for their exceptional contributions to promoting sustainable practices and integrating ESG principles into their operations.
Malaysia Steel Works (KL) Bhd won the Most Outstanding ESG Initiatives of The Year award for large companies, with Iskandar Malaysia Studios Sdn Bhd taking the SME honours. Other winners were Heineken Malaysia, Sunway Group and RHB Bank Berhad. The recognition underscores their leadership in advancing environmental stewardship, social responsibility, and strong governance practices, setting a benchmark for others in the industry.
New Carbon Market Alliance
Malaysia's private sector has launched the Carbon Market Alliance in anticipation of a possible carbon tax in the 2025 budget. The alliance aims to prepare businesses for future carbon pricing and promote carbon market development in the country. This move reflects growing awareness and proactive steps within the private sector to address climate change and align with global sustainability trends.
Malaysia's Ministry of International Trade and Industry (MITI) is considering implementing a carbon tax to encourage green investments and reduce carbon emissions, which is a timely move by the Carbon Market Alliance. This MITI aims to align Malaysia with global sustainability trends and attract environmentally conscious investors. The proposed tax is part of broader efforts to promote sustainable practices and meet climate goals. MITI believes that such a policy could accelerate the adoption of green technologies and support the country's transition to a low-carbon economy.
Discounts for Good ESG Implementation by SMEs
RHB Insurance has introduced Malaysia's first ESG incentive scheme, tailored for small and medium enterprises (SMEs). This initiative offers premium discounts to SMEs that implement sustainable practices, aiming to encourage broader adoption of ESG principles among businesses.
The program underscores RHB Insurance's commitment to supporting sustainability in the Malaysian business sector, aligning with global trends towards responsible business practices. This scheme is part of RHB's broader strategy to promote ESG awareness and adoption in Malaysia.
ESG Training by ReSkills
ReSkills, an online learning platform, plans to expand its MyESG100 initiative to Sabah and Sarawak. This initiative, which promotes ESG (Environmental, Social, and Governance) awareness and practices among small and medium enterprises (SMEs), has been gaining traction. The expansion aims to reach a broader audience in these regions and support more businesses in adopting sustainable practices.
ReSkills' growth reflects the increasing demand for ESG education and its commitment to fostering sustainable development across Malaysia.
Global ESG trends
Marine Minerals ESG Handbook is Now Available
The Marine Minerals ESG Handbook project released its first edition on August 21, 2024. The global Handbook sets new standards for responsible practices in the marine minerals sector amid the rising demand for critical metals for renewable energy. Developed over two years with input from various stakeholders, it provides guidance on meeting global ESG disclosure standards specific to marine minerals.
It also includes recommendations for consistent disclosure practices and aims to enhance transparency and sector-wide improvements. While voluntary, the Handbook adapts existing ESG reporting standards to the unique challenges of marine minerals, promoting proactive ESG considerations and aligning with global sustainability goals.
Sustainable Loans from CIMB Singapore
CIMB Singapore has introduced a Sustainability-Linked Loan/Financing Programme for SMEs, simplifying access to sustainable financing. The program offers SMEs digital and cost-effective methods for reducing greenhouse gas emissions in line with global standards.
It collaborates with ESG data firm STACS and Bureau Veritas for verification. Based on their sustainability achievements, participants can receive interest rate rebates of up to 0.40%. Additionally, SMEs will receive an Asia-Pacific Green Deal Badge, enhancing their sustainability credibility.
Recycling Initiative Delayed Again
Singapore's beverage container return scheme, initially set to start in 2022, has been further delayed and will launch in April 2026. The initiative, which requires consumers to pay an extra S$0.10 for refundable drink containers upon return, is managed by a nonprofit consortium of beverage producers.
Delays are due to the consortium's need for more preparation time. The scheme aims to improve Singapore’s low domestic recycling rate and reduce waste sent to landfills.
Investments in Climate Tech in the Middle East Rise
Climate tech investments in the Middle East tripled in 2023, reaching $5.8 billion. However, most of these funds are for investment outside the region, especially in Europe and North America. This trend reflects the region's growing interest in sustainable technologies and highlights the challenges of keeping investments local.
Experts emphasise the need for more robust regional ecosystems to support and retain climate tech innovations despite the increase.
China’s Rapid Growth in Clean Energy Presents Valuable Lessons for Western Countries
China has become a renewable energy leader, particularly solar and wind power, due to strong government support, strategic investments, and a focus on scaling up technology. Western nations could benefit from adopting similar approaches, including fostering innovation, supporting long-term projects, and creating policies encouraging the growth of clean energy industries.
China's model demonstrates the effectiveness of coordinated national strategies and large-scale investments in advancing sustainable energy.
US Companies and ESG Reporting
A survey by EcoOnline reveals that 68% of large US companies now have dedicated budgets for sustainability reporting, as the importance of ESG (Environmental, Social, and Governance) practices in corporate strategy continues to grow. The survey highlights increased investment in sustainability efforts driven by regulatory requirements, stakeholder expectations, and the pursuit of long-term value creation.
This trend indicates a significant shift toward more structured and accountable sustainability practices within major corporations.
Upcoming ESG/Sustainability Events
Malaysia:
National Climate Governance Summit
September 10 to 12
Sasana Kijang, Bank Negara, Jalan Dato Onn, Kuala Lumpur and Online
Online/Global:
Advancing sustainable finance for nature in Asia
September 11 @9 am to 6 pm
Capital Tower, Level 9, Left Brain & Right Brain, Singapore
September 17, 18 & 19 @7 am to 10 am GMT
Online Course
3rd Annual Global ESG and Sustainability Summit
September 19 & 20
Pullman, 19 Rue Du Commandant René Mouchotte, Paris, France
Certified Sustainability ESG Practitioner Program, Leadership Edition 2024, with Live Zoom Sessions
September 27 10:00 am EDT & October 1 @ 1:30 pm EDT
Online Course
Renewable Energy Project Finance & Financial Modelling
October 1 - 10 @12 pm to 3 pm GMT
Online Course
The 2nd European Sustainable Plastics Summit
October 22 - 23
Frankfurt, Germany and Online
Related Blog Posts:
ESG News | July 2024 Roundup
ESG News | June 2024 Roundup
