With the introduction of the Industry Environmental, Social, and Governance (iESG) Framework, Malaysia is moving closer to sustainability and its goal of attaining net-zero emissions by 2050. The Investment, Trade, and Industry (MITI) Ministry launched this effort, which has the potential to be a game-changer in helping Malaysia meet its sustainability goals within a seven-year time frame and potentially tap into the US$12 trillion global ESG market.
The iESG Framework was revealed by Tengku Datuk Seri Zafrul Abdul Aziz, Minister of MITI, during the Phase 1.0 launch, which runs from 2024 to 2026. Phase 2.0 is scheduled to take place between 2027 and 2030.
Furthermore, in terms of sustainable growth and job creation, “MITI believes that the transition towards sustainability and fulfilling Malaysia’s aspiration to become net zero by 2050 will bring numerous benefits,” he stated.
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Malaysia has pledged to achieve carbon neutrality by 2050 and a 45% reduction in greenhouse gas emissions by 2030 as a signatory to the Paris Agreement. The nation’s Push for Net Zero mission is supported by the New Industrial Master Plan 2030 (NIMP 2030), which is aligned with the iESG Framework.
In addition, the framework includes six essential enablers, 17 strategies, 50 deliverables, and four pillars: standards, financing, capacity building, and market mechanisms. It seeks to direct manufacturing companies—particularly micro, small, and medium-sized enterprises (MSMEs)—in the direction of ESG compliance.
“Just Transition” is given priority in Phase 1.0. This strategy maintains inclusion within Malaysia’s economic framework by acknowledging that local companies, particularly MSMEs, cannot quickly adhere to norms already established by organisations in developed markets over the course of a decade or more.
Lastly, zafrul emphasised the significance of helping MSMEs in the manufacturing sector, which employs 7.3 million people and accounts for roughly 98% of Malaysia’s commercial enterprises. About 8% of the country’s gross domestic product and 9% of its exports are made up of these MSMEs.
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