Why did PM Anwar stress keeping SMEs from high ESG costs?

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Prime Minister Anwar Ibrahim Emphasised Protecting SMEs from High ESG Costs to Prevent Undue Burden

Prime Minister Datuk Seri Anwar Ibrahim highlighted the critical need to shield Small and Medium Enterprises (SMEs) from escalating Environmental, Social, and Governance (ESG) compliance costs. This directive stems from a concern that excessive financial demands could impede their operations and growth. To mitigate this, a phased approach to ESG implementation is recommended, involving larger entities to support their smaller counterparts within the supply chain.
Recommendations for a Phased ESG Rollout

To prevent SMEs from being unduly burdened by high ESG compliance expenses, a "dry run" for ESG implementation has been proposed. This exercise is intended for public-listed companies, multinational corporations, and government-linked companies (GLCs). The objective is for these larger organisations to conduct the initial implementation, thereby creating a framework and support system for the SMEs operating within their respective value chains. This approach aims to ensure that the transition to ESG standards is manageable for all businesses, regardless of size.
Strengthening Training and Support Mechanisms

In conjunction with the proposed dry run, relevant ministries have been advised to bolster training programmes. These initiatives are specifically designed for targeted business entities to equip them with the necessary knowledge and skills for ESG compliance. By enhancing educational and support mechanisms, the government aims to facilitate a smoother integration of ESG principles across the business landscape, ensuring that SMEs are not left behind due to a lack of resources or understanding.
National ESG Strategic Plan Development

The National ESG Strategic Plan was formally agreed upon during the National SDG Council Meeting 2024. This plan outlines the government's strategy to gradually guide Malaysian business entities towards ESG compliance and reporting. Beyond mere adherence, the aim is to foster a competitive advantage and promote sustainable development for the nation. The phased approach, including the proposed dry run involving larger corporations, is a cornerstone of this strategic plan.
Progress on Sustainable Development Goals

The meeting also provided an update on Malaysia's performance concerning Sustainable Development Goals (SDG) indicators. Encouraging progress has been noted, with a projected achievement of 43 per cent of the SDG target by 2030. This figure surpasses the global average projection of 17 per cent. The Madani government remains committed to these SDG targets, integrating them with the Madani Economy framework as part of a comprehensive strategy to enhance national initiatives.

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Why did PM Anwar stress keeping SMEs from high ESG costs?

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