Integrate ESG Principles In Business For Long-term Value Creation, SMEs Told

SEPANG, Sept 5 (Bernama) -- Small and Medium Enterprises (SMEs) should begin integrating Environmental, Social, and Governance (ESG) principles into their businesses, despite the associated costs, to enhance their company’s value, an academician said.

Lecturer at the Centre For Sustainable and Inclusive Development, Faculty of Economics and Management, Universiti Kebangsaan Malaysia (UKM) Dr Naziatul Aziah Mohd Radzi said even small steps could lead to significant changes in the future.

“The companies need to learn and understand what sustainability and ESG are now and how they are interrelated.

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“It must be well integrated and comprehended by all the entities in the companies,” she said during a panellist session held here on Wednesday by the Malaysian Communications and Multimedia Commission (MCMC), titled “Digital Ecosystem: Ensuring Sustainability, Information Integrity and Online Security.”

Naziatul Aziah said many aspects of ESG seem complicated, especially for small businesses as they should start by focusing on the core elements of these principles.

She said understanding the ESG would provide companies with input on how their businesses could impact the environment mainly on resource use, waste management, pollution control, carbon footprint and efforts to combat climate change.

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Naziatul Aziah further explained that SMEs could also benefit from recognising the social impact of their businesses, improving employee relations, enhancing customer satisfaction, fostering a positive workplace culture, and promoting good governance practices such as business ethics and transparency.

“So, no worries, ESG won't kill you, probably it would hurt (your pocket) a little bit as it will consume a little bit of the company's money. But that's common because the company needs to create a value from ESG and send employees for training, to instill a better understanding of ESG,” she stressed.

Naziatul Aziah said the current trends in the ESG landscape in Malaysia show growing awareness and commitment among companies and stakeholders.

However, she said while progress is evident, there's still a need for a more comprehensive integration of ESG principles across all sectors, ensuring that sustainability is embedded in business strategies and operations for long-term impact.

Meanwhile, another panellist, Dr Amal A.M Elgharbawy of International Islamic University Malaysia (IIUM) said that mobile e-waste recycling involves both urban and rural users, with a diverse demographic profile, predominantly younger and more educated individuals.

“Positive attitudes towards e-waste recycling are common but intentions are strongly influenced by factors such as attitude, environmental concern, perceived control, and subjective norms,” she said.

The IIUM Assistant Professor and Professional Technologist at the International Institute for Halal Research and Training also recommended various campaigns to be held across all levels; schools, social media, and new policies.

“We need to strengthen laws and foster collaboration among stakeholders to build a robust e-waste recycling system,” she said, suggesting future research should include longitudinal studies to track changes in recycling knowledge and practices and explore international best practices and challenges.

On digital literacy in Malaysia, Associate Prof Dr Sabariah Mohamed Salleh of UKM said Malaysia is probably still crawling to enhance digital literacy skills.

“There has been a lot of efforts, I must say, from organisations, from MCMC, for instance, through the KDB (Klik Dengan Bijak) initiative and their campaigns and et cetera.

“But there must be some other outreach campaigns and support from all stakeholders,” she said.

Dr Sabariah said the KDB initiative has been proactive in safeguarding internet users from online risks and threats, but its content has primarily taken a reactive approach.

Citing an example from the neighbouring country, she said Indonesia has already embedded or has media literacy/digital literacy skills as part of its school curriculum.

“The analysis on digital and media literacy in Malaysia has highlighted the critical need for a comprehensive and multi-faceted approach to address the challenges and opportunities presented by the rapidly evolving digital landscape,” she said.

Dr Sabariah said the university suggested a five-year roadmap, outlining a phased approach, starting with foundation and planning in the first year, followed by education system integration, workforce development and community engagement, policy and regulatory frameworks and finally evaluation improvement and sustainability.

Throughout the implementation process, continuous monitoring, multi-stakeholder collaboration, investment in research and innovation, and effective communication would be crucial to ensure the framework’s success and relevance.

-- BERNAMA