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SMALL and medium-scale enterprises (SMEs) have been urged to adopt the environmental, social and corporate governance (ESG) framework to continue gaining benefits from the large number of multinational investors.
Penang Chief Minister Chow Kon Yeow said that ESG is now a mainstay to lure both foreign and domestic direct investments, and it is therefore time for local SMEs here to embrace it in a big way.
"It needs to be ingrained as part of our corporate culture, and its practises will also ensure our business models remain competitive in a global sense," Chow said after opening the Penang ESG conference at the Olive Hotel.
The conference was organised by the Penang Green Council, a state-linked body. Also present was state executive councillor for housing and environment, Datuk Seri S. Sundarajoo.
Chow said that ESG is aligned with the state's unity manifesto, which features pledges made by the present state government for the state election in August this year.
"It is crucial for our SMEs to embrace ESG frameworks. This is not only because of its increasing significance within the operations of an enterprise, but also due to its contribution to the state economy through encouragement of high impact investments and development."
Many multinationals have now set ESG benchmarks as a pre-requisite in conducting business with fellow large corporations and local SMEs.
Chow wants SMEs and large scale local-based corporations to work closely with the state to propagate ESG values.
With climate change in the background, he stressed, practising ESG which spells out action on sustainability will also help the state to cope with adversities from rough weather patterns.
It also encourages innovation in dealing with challenging weather, he added.
Good social conduct is also essential in protecting the environment while sound governance is an aspiration for all stakeholders to strive for, either in the public or private sectors, said Chow.
He also encouraged planting rather than uprooting of trees, so that vegetation can help authorities cope with heavier rainfall and landslides.
Disclosure on ESG reporting has been made mandatory by Bursa Malaysia since 2016 to provide evidence for transparency and accountability in business decisions and operations to investors. – The Vibes, November 23, 2023.
