KUALA LUMPUR, Oct 3 (Bernama) -- The launch of the National Industry Environmental, Social and Corporate Governance (ESG) Framework or i-ESG was timely as it provides the much-needed direction for small and medium enterprises (SMEs) in navigating ESG requirements.
Small and Medium Enterprises Association of Malaysia (SAMENTA) national president Datuk William Ng said the country now has a national framework that will serve as a guideline and ‘proof of compliance’ required by many destination markets.
The i-ESG was launched by the Ministry of Investment, Trade and Industry (MITI) yesterday.
“SAMENTA views the ‘Just Transition’ approach positively as we were concerned that the framework will be overly prohibitive.
“MITI’s tiered approach is supportive in nature and the ministry has clearly taken the feedback from the industry seriously in preparing the framework, thus we urge all manufacturing SMEs to adopt the i-ESG as soon as possible,” he said in a statement today.
Ng said exporting SMEs have been saddled with new ESG requirements set by clients in developed economies, and have been overwhelmed with the myriad of standards and frameworks with insufficient resources to meet all of them.
“Failure to meet these new requirements would mean our SMEs will be excluded from the global supply chain,” he said.
Hence, the association is also looking forward to more support from the government in the form of low-interest loans to cover plant redesign and upgrade, new equipment, consultancy services and training for ESG.
“MITI is right in not mandating full compliance to any standard at this point in time, given that many of our SMEs are not fully prepared for ESG and that many of the requirements set by customers and importers can differ quite significantly from one another,” he said.
Ng added that SAMENTA was among the first associations to establish a Sustainability and Circular Economy Working Group three years ago, and is prepared to work with MITI and other agencies to assist SMEs in the manufacturing and services sectors to transition into the low carbon economy.
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