Environmental, Social and Corporate Governance (ESG)
The government has announced the launch of ESG standards to help companies transition to renewable energy.
On 11 April 2023, the Malaysian government announced that it will introduce a framework on environmental, social, and corporate governance (ESG) standards by the end of 2023. The framework will aim to assist small and medium-sized enterprises (SMEs) in funding and capacity building and support the transition to renewable energy.
The Malaysian government recognised that a number of export markets require ESG compliance from exporters and that SMEs in particular need further assistance in this regard.
ESG is best characterized as a framework that helps stakeholders understand how an organization is managing risks and opportunities related to environmental, social, and governance criteria. Stakeholders do not just include investors but also customers, suppliers, and employees. All of them are increasingly interested in how sustainable an organization’s operations are.
The Benefits of ESG for SMEs:
Competitive advantage
Having an ESG program in place helps boost brand recognition and promotes brand loyalty. Today’s consumers and clients are increasingly aware of ethical spending and care more about what a company does to support sustainability. SMEs that have taken steps to meet sustainability concerns (having an ESG program) have been known to attract more customers and clients.
Supply Chain Prospects
Much like investors are paying more attention to ESG, many companies are looking for supply chain partners that embrace sustainability efforts. For example, many retail stores are making decisions not to stock products made by companies considered to have poor ESG performance.
Cost reduction
By implementing an ESG program, SMEs can track key metrics like energy consumption, water consumption, waste management costs, and raw material usage. This tracking ability is a prerequisite for companies to plan programs to improve efficiency, which leads to reduced costs associated with energy and water usage or waste management. In addition to improving cost management, ESG programs also allow for operational efficiency, less exposure to fines/penalties, better risk management, and improved innovations.
Attraction and Retention of Talent
Today, many job seekers are looking for more than just a paycheck. They want to enjoy their jobs, feel appreciated, and make a positive impact. Working for a company with strong ESG goals appears to be the top factor for employees’ job satisfaction.
More attractive to banks and investors
Attracting the attention of investors or banks is one of the biggest advantages of having an ESG program. The growing public concern connected to climate change and sustainability is causing investors and banks to look more closely at sustainable companies to encourage this movement.
How Can ELITE Help?
We provide ESG training and consultancy services. We offer specialized expertise and extensive practical experience to assist clients in developing management systems from the initial concept to the establishment and successful implementation of the management systems.
We use the following consultation approach to assist you in achieving certification:
