Banks and Financial Institutions Urged to Assist MSMEs in Adopting ESG Standards

Published on:
by KnowESG
1677576

Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz urged Credit Guarantee Corporation Malaysia Bhd (CGC), banks, and financial institutions (FI) to explore ways to shore up micro, small, and medium-sized enterprises (MSMEs), particularly in adopting environmental, social, and corporate governance (ESG) principles.

He said by 2025, ESG assets are projected to reach US$53 trillion (US$1 = RM4.44), representing a third of global assets under management. ESG funds currently account for around 10 per cent of global fund assets.

"As such, it is critical to ensure that MSMEs are not shut out of markets or deprived of future financing due to non-compliance with ESG principles in their operations,” he said.

He stated that a vibrant MSME sector would indicate a robust economy and resiliency.

He stated that a deliberate effort must be made to strengthen the expertise, digital skills, and collaborations of MSMEs with the innovation community—multinational firms and academia—to assist them in developing better solutions.

In addition, banks and FIs must play an active role in helping the transition of MSMEs to low-carbon and sustainable practices.

"Your zero-carbon targets may be aggressive, in which case, it is more important for you to guide and perhaps handhold the MSMEs in achieving their ESG targets,” he said.

The Minister stated that government-affiliated enterprises and government-affiliated investment companies have also embraced the sustainability idea, which is crucial as the goal is for these principles to trickle down to MSMEs.

He noted that Budget 2023 would also prioritise programmes to make MSMEs more competitive and resilient, as well as comparable actions to restore the sector's capacities and increase their competitiveness.

In 2021, MSMEs contributed 37.4% of Malaysia's gross domestic product and employed 47.8% of the labour force.

"Given the MSMEs’ significant contribution to the country’s economy and job opportunities, clearly this is a sector that we must actively promote,” he said.

Source: The Star

For more sustainable finance news

Share:
esg
esg
esg
esg

Sustainable Finance Headlines

Circular Secures $10.5M for Recycled Materials Platform

Circular Secures $10.5M for Recycled Materials Platform

SocGen Wins Top Sustainability Bank

SocGen Wins Top Sustainability Bank

BEA Grants Wilmar $100M Sustainability Loan

RBC's Push for Client Decarbonisation

MFSA Campaign Exposes Greenwashing Risks

CBA Backs Green Businesses with New Loan

Mirova Seeks €200M for Impact Fund

Canada & Rio Tinto Team Up to Green Labrador Iron Ore

Plastic Credits for Sustainable MSMEs

EDB Helps Businesses Go Green in Singapore