THE state's custodian of environment preservation - the Penang Green Council (PGC) has undertaken a significant step to provide climate mitigation funding.
In a first of its kind collaboration with any financier, PGC and Alliance Bank Malaysia Berhad, announced the launch of a RM100 million ESG Climate Mitigation Fund.
It is designed at helping small and medium enterprises (SMEs) adopt sustainable practices.
The initiative begins with an initial RM20 million dedicated to manufacturers, with plans to scale up to RM100 million over time, said PGC in a statement.
Unlike larger corporations commonly with the resources to meet sustainability targets, SMEs often face challenges due to cost and access to technical expertise, noted PGC general manager Josephine Tan.
While there is no mandatory ESG requirement for SMEs, many are under increasing pressure from their corporate buyers and anchor clients to improve sustainability practices, as large corporations face regulatory obligations to disclose their environmental impact.
Tan emphasised that the fund is designed to support smaller companies in Penang in their sustainability journey.
"We realise that it takes money to meet ESG standards, and we want to help SMEs. Multinationals may have their resources, so our focus will be on smaller companies," said Tan.
The fund will enable SMEs to embrace sustainable practices without viewing them as punitive regulations.
Details of the mechanism will be shared soon, while the eligibility will be limited to only businesses operating in Penang.
Alliance Bank's Chief Sustainability Officer, Roy Heong Beng Wai explained that the funds will be disbursed in stages to eligible candidates.
“The fund initially focusses on enabling transition for manufacturers and their corresponding supply chains in the Electrical and Electronics (E&E), Healthcare, Plastics and Chemicals sectors. After which, we will extend it to other industries. We allocated an initial sum of RM100 million, starting with RM20 million as a first tranche aimed at spurring transition initiatives of SMEs in the state of Penang", he said.
Beyond financing, Alliance Bank will provide capacity building, workshops, climate assessments, and green technology solutions to ensure a holistic approach.
The bank will also match SMEs with vetted green partners who can deliver the necessary skills and services. – November 26, 2025
