Inve$t | Market Sentiments | 24 November 2023
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According to Investment, Trade, and Industry Ministry (MITI) deputy secretary-general (Industry) Datuk Hanafi Sakri, Malaysia is confident it can achieve its ESG goals within seven years or less due to its phased approach.
In his keynote speech at the ESG Evolve 2023 Conference & Exhibition, he said that i-ESG Phase 1.0 lays the groundwork and fosters the development of a robust ecosystem to help ensure companies’ readiness to meet the more rigorous demands of Phase 2.0 from 2027 to 2030. This phased, progressive approach is extremely important to ensure Malaysian companies can continue or start to fulfil the growing demand for sustainable products, and the requirements for ESG reporting in export destinations such as the US and EU. Malaysia will begin with the Phase 1.0 – “Just Transition” from 2024 to 2026, followed by the Phase 2.0 – “Accelerate ESG Practices” from 2027 to 2030.
During Phase 1.0, manufacturing companies, including MSMEs, will be supported on starting their sustainability/ESG journey through self-readiness assessment, outreach, training/mentoring programmes and financing options. These include i-ESGReady, which is a readiness assessment programme, and i-ESGStart, which offers a practical guide with step-by-step instructions, illustrative examples and templates. Both are meant to be references for manufacturing businesses to begin their sustainability journey.
Miti has also conducted KenalESG outreach and awareness programmes in Kuala Lumpur (200 companies), Penang (190 companies), Johor (130 companies), Pahang (150 companies) and Sarawak (100 companies) to introduce them to the i-ESG Framework. It is imperative that due consideration is given to MSMEs within the manufacturing sector, ensuring they are not left to navigate the complexities of adopting sustainable practices on their own. This is particularly crucial as MSMEs may lack the financial resources, capacity or technical expertise related to ESG principles.
He said that to ensure the success of sustainable practices across the entire manufacturing landscape, targeted assistance, capacity-building initiatives, and accessible resources must be provided to MSMEs. All programmes under the Phase 1.0 will help companies to identify gaps and introduce policies and support systems. For MSMEs, this is extremely important, to ensure participation in ESG-compliant public listed companies and multinational corporation vendor ecosystems as well as access to ESG-sensitive export markets.
The government is committed to facilitating transition for companies by organising informational clinics. These sessions are specifically designed to provide guidance on utilising the i-ESGReady and i-ESGStart. The aim is to empower companies with the knowledge and skills necessary to navigate the intricacies of these tools successfully.
Govt eyeing a ‘good slice’ of projected US$2.7bil ASEAN EV market – Tengku Zafrul
According to Investment, Trade and Industry Minister Datuk Seri Tengku Zafrul Abdul Aziz, the government is determined to capture a “good slice” of the ASEAN EV market, which is estimated to reach US$2.7 billion by 2027, from US$500 million in 2021. Malaysia has a competitive edge to attract more high-value investments, having developed a comprehensive ecosystem for the EV and Next Generation Vehicles (NxGV) industries.
Speaking at the launch of E-Mobility Asia 2023, he said that in getting the fundamentals right on our NxGV ecosystem, we are diligently building the necessary infrastructure to achieve our target of having EVs and hybrids account for 20% of new car sales by 2030; 50% by 2040 and 80% by 2050. The government has a strong policy push and over the past 50 years, Malaysia has developed a strong electrical and electronics (E&E) industry, mainly in semiconductors, that have firmly entrenched itself in the global supply chain.
He elaborated that semiconductors allow EVs to become smarter and safer, paving the way for a greener future. Malaysia accounts for 7% of global semiconductor trade and 13% of global chip testing and packaging. Therefore, MITI and MIDA are strongly pushing for more semiconductor investments. Between 2018 and June 2023, MIDA approved 59 projects worth RM26.2 billion in the EV and related ecosystems for vehicle assembly, manufacturing parts and charging components.
Malaysia has become a highly attractive destination in the region for all EV investors because of these established existing ecosystem advantages that are highly conducive for the development of EVs and its related components. These are compelling factors for big names such as Tesla to announce its entry into the country, joining global automakers like Geely, Chery and BYD from China, Hyundai from South Korea, as well as Mercedes Benz and BMW from Europe, that are already in the Malaysian market.
However, he added that Malaysia has still a long way to go to ensure a robust EV ecosystem, such as in developing a greener grid and related power distribution networks. Most importantly, the wide range of new mobility solutions can open up technology transfer and innovation for our SMEs, as well as higher-paying jobs for Malaysians. MITI is constantly reviewing policies to ensure Malaysia’s EV ecosystem is holistic and fully supported to attract high-level investments.
We look forward to welcoming more multinational EV, NxGV and renewable energy (RE) investors to Malaysia, to become our growth partners in developing a strong Malaysian EV supply chain, to meet the needs of the regional and global market. Toward that end, we also hope to collaborate with our neighbours in ASEAN — whether they are from Thailand, Vietnam, Singapore, the Philippines or Indonesia — to complement each other’s strengths, in order to capitalise on supply chains that have shifted directly onto our ASEAN doorstep.
The government will commence the operation of the Invest Malaysia Facilitation Centre (IMFC) on Monday Nov 27, ahead of January. It has been scheduled earlier, to facilitate the business community and investors. IMFC is a one-stop centre to speed up approval processes, including the provision of consultation and advisory services, and to reduce bureaucracy in public service delivery. This initiative is an improvement to the existing advisory service centre at MIDA and is in line with Prime Minister Datuk Seri Anwar Ibrahim’s recommendations.