More SMEs needed to strengthen Malaysia's sustainability push
By SUFEA SALEHUDDIN
SMALL and medium enterprises (SMEs) must play a greater role in driving Malaysia's sustainability efforts, particularly as global regulations tighten and demand for low-carbon products increases.
Natural Resources and Environmental Sustainability Minister Nik Nazmi Nik Ahmad said SMEs are essential to the nation's green transition, but face structural limitations that require targeted support.
'Many SMEs are still struggling to adapt to climate-related regulations. They do not have chief sustainability officers or dedicated compliance teams like public-listed companies,' he said at the launch of The Green Factory's flagship retail store at The Campus Ampang on Tuesday.
Nik Nazmi said the government is aware of these challenges and is working on multi-level initiatives to assist the sector.
He also urged large corporations, including government-linked companies (GLCs) and multinational corporations (MNCs), to take an active role in building capacity across their supply chains.
'We hope bigger companies that rely on SME suppliers will help them switch to more sustainable practices by offering guidance, training, and knowledge transfer,' he added.
He also said Malaysia's furniture sector, though facing a reduced local timber base, remains a strong contributor to exports and holds significant potential for green transformation.
'There is significant global demand for sustainable wood-based products, particularly from Europe. If we can position our SMEs to meet those standards, the economic benefits will follow,' he said.
Nik Nazmi cited The Green Factory as an example of SME-led innovation in the circular economy.
Originally a school furniture supplier, the company has grown into a sustainability-focused enterprise by upcycling timber waste into premium products, gaining international recognition in the process.
'This is a business that grew from a small workshop into a fully-fledged sustainability enterprise. It shows how local innovation, led by young people, can drive meaningful environmental change,' Nik Nazmi said.
He also pointed to emerging international frameworks such as the European Union Deforestation Regulation (EUDR) and the Carbon Border Adjustment Mechanism (CBAM), warning that Malaysian SMEs could face trade barriers if they are not adequately prepared.
'These policies are coming fast, and if we do not prepare our SMEs now, they will be disadvantaged. That is why we are calling for a whole-of-government and whole-of-supply-chain response,' he said.
Nik Nazmi added that public-facing initiatives such as 'Sustainaboleh!'—a sustainability programme held in conjunction with the launch—play a critical role in reshaping both public behaviour and industry practices.
'It is not just about policy— it is about making sustainability tangible and relatable to everyday Malaysians,' he said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malaysian Reserve
2 hours ago
- Malaysian Reserve
Bank credit costs seen rising on SME strain
CREDIT costs in the Malaysian banking sector are expected to edge higher as economic growth slows and risks mount within the small and medium enterprise (SME) segment. CIMB Securities Sdn Bhd, in its latest report on historical asset quality trends, is maintaining a 'Neutral' stance on the sector despite forecasting mild deterioration in credit metrics. 'We have reviewed our sector credit cost projections, taking into consideration the potential impact of slower growth on the SME segment and historical trends. Our assumptions indicate that sector credit costs may rise by 12 basis points (bps) on account of a possible change in probability of default assumption for the SME segment. 'However, as this is in line with our earlier assumed 15bps increase in credit costs, we are maintaining our forecasts and 'Neutral' rating,' it noted. The research house said that the SME portfolio remains under scrutiny. 'The initial segment that may face some risk is likely to be the SME segment, which currently accounts for 16.5% of total loans on average for the banks under our coverage,' it stated. 'Assuming probability of default (PD) is raised to 6% from 4.5% for the SME segment, while loss given default is maintained at 50%, this implies that the estimated credit loss (ECL) may need to be raised by 75bps for the SME segment in a slowing growth cycle. On overall basis, this translates to a 12bps increase in sector credit costs,' it explained. CIMB Securities noted that credit costs historically trend in tandem with macroeconomic cycles. 'During a normal economic cycle, credit costs usually range from 20bps to 30bps, while a good economic cycle typically leads to benign credit costs of 10bps-20bps. In a slower growth cycle, credit costs tend to climb higher than 30bps, towards the 40bps-50bps range.' The 2020 pandemic-driven recession provides a stark example. 'The most recent recession during the 2020 Covid-19 pandemic caused a significant jump in credit costs to 79bps in 2020, coinciding with a 5.5% year-on-year (YoY) decline in GDP and an 8.6% YoY drop in exports. Prior to that, during the 2008 recession, credit costs peaked at 70bps as GDP declined by 1.5% YoY and exports contracted by 10.9% YoY.' While direct trade-related loans remain low, secondary risks are a concern. 'Exports-related loans are insignificant, accounting for 1%-4.7% of total loans for banks under our coverage. We reiterate there will likely be a larger impact from secondary spillover effects on trade-related supply chain vendors and suppliers.' CIMB Securities is leaving its forecasts unchanged for now. 'We are maintaining our forecasts for now, as our latest estimate is based on broad assumptions while each bank's portfolio will have a different risk profile.' The firm retains its 'Buy' recommendations on Alliance Bank Malaysia Bhd, Public Bank Bhd and RHB Bank Bhd. 'We maintain our 'Neutral' sector rating, and retain our 'Buy' calls on Alliance Bank, Public Bank and RHB Bank, as dividend yields remain attractive at current levels,' it concluded. — TMR This article first appeared in The Malaysian Reserve weekly print edition
Daily Express
a day ago
- Daily Express
SME meet draws over 400 participants
Published on: Sunday, June 22, 2025 Published on: Sun, Jun 22, 2025 By: Sisca Humphrey Text Size: Phoong (7th left) with Deledda (8th left), Sunny (6th left) and speakers after receiving a token of appreciation. Kota Kinabalu: Over 400 participants from across Malaysia, including SME owners, industry leaders, and professionals, attended the SME Sabah 2025 Conference, here, on Friday. The full-day event, themed 'Mastering Sustainability & Empowering the Change', was officiated by State Industrial Development and Entrepreneurship Minister Datuk Phoong Jin Zhe. SME Sabah President Dr Deledda Tan said the conference aimed to equip businesses with practical strategies while strengthening their role in the State's economic growth. 'We want participants to walk away recharged, equipped with actionable insights and meaningful connections,' she said. Dr Deledda also announced that SME Sabah is now a certified HRD Corporation training provider, giving members access to structured development programmes. The event is recognised by the Institution of Engineers Malaysia (IEM), with attendees eligible for 6.5 Continuing Professional Development (CPD) hours. Advertisement Organising Chairman Sunny Chai said the conference tackled key issues like ESG compliance, workplace safety, and staff retention. 'We want our SMEs to not only grow but remain resilient and sustainable in a fast-evolving market,' he said. Among the speakers were AirAsia CEO Dato' Captain Fareh Mazputra, Professor Cheah Kok Hoong, Datuk Javern Lim and Assoc Prof Dr Saihpuddin Saupin, who shared insights on sustainable business leadership. The event concluded with a networking dinner after a full day of talks and panels. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
New Straits Times
3 days ago
- New Straits Times
Nearly 900 schools join govt's Sekolah Angkat Madani programme to bridge education gap
KUALA LUMPUR: Nearly 900 schools nationwide have joined the government's Sekolah Angkat Madani initiative, also known as Samadani, aimed at narrowing the education gap and supporting underserved communities. The programme, introduced under the Madani Economy framework, is on track to meet its target of 1,000 participating schools by the year-end. Chief Secretary to the Government Tan Sri Shamsul Azri Abu Bakar said the initiative reflects the government's determination to ensure that no child is left behind, particularly in rural and under-resourced areas. "This initiative builds on the success of Kampung Angkat Madani and Santuni Madani, which demonstrated that direct, collaborative efforts are effective in helping those most in need. "With Samadani, the effort is being taken a step further by involving schools in need as part of the broader Madani agenda", he said after the launch today, adding that they hoped to meet the 1,000 schools target by October. He said nearly 300 of the participating schools are in Sarawak, Sabah, Kelantan, Terengganu, Kedah and Perlis — states identified as requiring additional support. The programme focuses on five core areas: upgrading school infrastructure, strengthening academic and student support, enhancing teacher development, providing financial aid and scholarships, and fostering student character and soft skills. Shamsul said the programme's success was made possible through the support of more than 80 participating organisations, including: - 29 government ministries (including the Prime Minister's Department) - 29 government-linked companies (GLCs) and government-linked investment companies (GLICs) - 27 Minister of Finance Incorporated (MoF Inc.) companies — such as Amanah Raya, Bank Rakyat and BSN, and; - 32 private sector partners, including 99 Speed Mart, Maxis and Dialog. "This is not a one-off contribution but a strategic partnership designed to bring lasting impact to schools and communities," he said. Shamsul also highlighted existing corporate initiatives that complement the programme including Unified Endpoint Management (UEM) Foundation's tuition programme, which recorded 95 per cent student attendance and 92 per cent academic improvement; and the Petronas Foundation's Duta Guru programme, which aims to train over 4,500 Stem teachers, with more than 1,300 already involved. The other corporate initiatives also include Yayasan Sime Darby's support for SK Abaka in Tawau, Sabah, following a fire; and TM Foundation's Future Skills programme, which has certified more than 10,000 students and 1,000 teachers in fields such as robotics and data analytics. He said these corporations are not just involved in repairing infrastructure but also in talent building, such as by introducing subjects such as artificial intelligence (AI) and digitalisation. The first phase of Samadani runs until Dec 31. Shamsul said the response so far has been very encouraging, and the government hopes to see more companies come forward to support the national movement. "This is not just an investment in education — it is an investment in Malaysia's future leaders and innovators."
