GEORGE TOWN – Small medium-sized enterprises (SMEs), which form the backbone of the economy, need to embrace the policies of the environmental, social and governance (ESG) if they want to compete effectively in the global marketplace.
Whether the SMEs like it, ESG is here to stay as part of the globalisation process which SMEs in the country need to undergo and adopt, said Entrepreneur Development and Cooperatives Minister Datuk Ewon Benedick.
Ewon said that the ESG has now become an invaluable part of the governance policy of SMEs, as it allows the enterprises access to the latest technology and measures to uphold strong values in protection of the environment, social rights and corporate governance.
“The ministry is working tirelessly to ensure that ESG is part of the sustainable practices of SMEs in the country,” said Ewon after opening the conference on ESG for the northern region at the Setia Spice Convention Centre here.
Also present was the SME Corporation Sdn Bhd chairperson Tan Sri Bernard Dompok.
SMEs are the backbone of economies across the world, and in Malaysia, there are 1.15 million registered SMEs, comprising more than 97% of the nation’s businesses and delivering 38.2% output to the gross domestic product.
Ewon said that the ministry has come out with one standard ESG practise which can easily be adopted by the SMEs, although it has yet to be made mandatory, but is encouraged.
Asked why ESG is important, Ewon said multinationals and government-linked corporations are now on ESG practises so dealing with them would be easier if the SMEs share the same code of practice.
“When operating, if our SMEs are in compliance with their foreign counterparts, it would also be easier to be part of the global supply chain, which is now more crucial than ever.”
Ewon also said that it is easier to penetrate the European and US markets if the national SMEs have the ESG practises, as the products and services accorded by the Malaysia companies would be of similar standards within the European nations and the US.
He added that the ministry has proposed 50 initiatives including generating awareness funding for ESG for this coming national budget, which will be tabled next month.
Ewon is confident that Prime Minister Datuk Seri Anwar Ibrahim, who is also the finance minister, would take notice of the recommendations to help the SMEs in the country.
In a separate event, SME Corp has organised a business matching exercise for 60 SMEs with 20 anchor companies in the northern region.
The deals are worth up to RM10 million for the SMEs through 380 engagement sessions, involving up to 10 high impact industries such as electronics and electrical, LED lighting, drone, aerospace and digital innovations. – The Vibes, September 28, 2023
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