SUSTAINABILITY or ESG practices are becoming increasingly essential for micro, small and medium-sized enterprises (MSMEs) in Malaysia as businesses worldwide transition towards more responsible and ethical operations.
Comprising 1.1 million firms, which constitute 96.9% of all business establishments in 2023, the development of this MSME segment remains a top priority for the Malaysian government.
Moreover, as a growing number of leading corporations, multinationals (MNCs) and government-linked companies (GLCs) navigating their businesses towards the ESG transition, they need to ensure that their supply chains, which are generally made up of MSMEs, are aligned to this agenda.
The Budget 2025 announcement reflects the government’s dedication to support MSMEs as a total of RM45.6bil has been provided for MSMEs in the form of loan facilities, financing guarantee, market access and capacity building initiatives to empower and enhance MSME development.Notably, RM1.3bil has been allocated for sustainability efforts, which includes continuing the Green Technology Financial Scheme till 2026 with a total financing amounting to RM1bil and funding amounting to RM300mil for National Energy Transition Facilitation Fund to support green future.
In addition, a loan fund of RM3.8bil will be provided by BNM to SMEs to support digitalisation and automation, sustainable and low carbon practices as well as agrofood production.
Among other initiatives for MSMEs in sustainability are:
• The net-energy metering (NEM) programme that has been extended to mid-2025, allowing more rooftops to adopt solar photovoltaic systems, thereby promoting renewable energy adoption;
• Firms or consumers buying energy-efficient electrical appliances can benefit from a rebate initiative worth RM70 million aimed at encouraging the adoption of green technologies;
• Extension of tax deduction for sponsorship of Smart Artificial Intelligence (AI)-Driven Reverse Vending Machine to December 2026; and
• Introduction of carbon tax on the iron, steel and energy industries by 2026 to ensure an inclusive transition to a low-carbon economy.
Towards this end, SME Corp Malaysia is collaborating with various ministries and agencies, academia and private sectors via a triple helix approach to enhance awareness and accelerate the adoption of ESG practices among MSMEs.
To facilitate sustainable practice adoption last year, the government, through SME Corp Malaysia, launched the PKSlestari Programme.
It aims to create a comprehensive sustainability ecosystem for MSMEs, focusing on:
• awareness and education
• MSME ESG assessments
• policy support
• market access
• standards & compliance, and
• financing & incentives.
In the same year, over 2,000 companies participated in the first MSME Sustainability Series that encompassed workshops and training by SME Corp Malaysia to enhance their ESG knowledge and understanding.
This year, SME Corp Malaysia introduced the ESG Quick Guide for MSMEs.
It comprises eight simple steps for firms to understand the importance of ESG in business, set objectives, identify related ESG indicators, produce a sustainability action plan and subsequently use an easy template for ESG reporting.
SME Corp’s education programme this year started with the “ASEAN Hong Kong, China (AHKC) Policy Dialogue and Workshop 2024: Empowering SME Sustainability.”, held in Kuala Lumpur in June, which garnered 248 participants.
An ESG seminar was also held on Oct 22, which officially kicked off the second MSME Sustainability Series under SME Corp Malaysia’s PKSlestari programme.
This campaign, consisting of seminars and hands-on workshops organised nationwide for targeted industries.
SME Corp. Malaysia
