Decarbonising growth, accelerating sustainability

Small and medium-sized enterprises (SMEs) make up the backbone of Malaysia’s economy and are crucial actors in the country’s globally connected supply chain. As sustainability-related disclosures come into force, however, these companies have found themselves in tough competition with larger corporates when it comes to the resources and talent needed to collect report on environmental, social and governance (ESG) metrics. Amid a challenging economic landscape, many have also found it difficult to build capabilities in understanding carbon and sustainable development.

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Recognising this, Malaysia’s government, regulators and private institutions have developed a gamut of tools to support SMEs in their sustainability reporting journey. As global sustainability standards are adopted by financial regulators, capacity-building programmes are also being developed with smaller firms in mind. This panel will include a stocktake of progress in Malaysia’s sustainability reporting landscape and discuss how future efforts can be best directed to spur SMEs further on their decarbonisation pathways.

Since the launch of Malaysia’s National Energy Transition Roadmap (NETR) last year and more recently, the establishment of the Energy Transition and Water Transformation Ministry, the push for increased renewable energy capacity in Malaysia has gained more widespread attention. Policy initiatives, including the launch of the fifth large scale solar scheme (LSS5) and Enegem, Malaysia’s cross-border renewable energy exchange have been widely welcomed.

Still, much of rural Malaysia remains reliant on natural gas and other fossil fuel-based sources of energy. Battery storage solutions are also prohibitively expensive, limiting the broader adoption of solar power. How can transition financing ease these concerns? Are existing policy frameworks and investment strategies sufficient to cope with the costs of the energy transition?

Malaysia’s federal government faces a challenging pathway to meeting its UNFCCC pledge of becoming carbon neutral as early as 2050. While the Ministry of Natural Resources and Environment is the focal point for national climate commitments, state governments as constitutional stewards of their land and resources hold the key to unlocking forests, oceans and other physical ecosystems for carbon sequestration and removal.

Who then should be entrusted with the final say on carbon? Should federal or state governments be responsible for overseeing carbon trading and as such, benefiting from its growing economics?

The answers to these questions will undoubtedly affect key players in Malaysia’s carbon market, local communities and Indigenous Peoples, as well as industries looking to leverage on carbon credits as part of their sustainability journeys. This debate brings together thought leaders in the country’s carbon scene to identify the key concerns surrounding carbon management.