SMEs Must Begin Carbon Reporting As Trade Partners Tighten Standards -- BNM

KUALA LUMPUR, Nov 19 (Bernama) -- Bank Negara Malaysia (BNM) has called on small and medium enterprises (SMEs) to begin measuring and reporting their carbon emissions as global buyers tighten sustainability requirements across supply chains.

BNM assistant governor Madelena Mohamed said the shift is already happening in major export markets, where trade counterparts increasingly require suppliers to provide basic sustainability data.

“Even if you are not selling directly to them, very often your local trade partners are part of a supply chain that ultimately sells to global markets which have these reporting requirements,” she said at the JC3 SME Focus Group (SFG) Climate Conference for SMEs 2025 recently.

She said the demand for emissions information is being driven by policies such as the EU Deforestation-Free Regulation (EUDR), the Carbon Border Adjustment Mechanism (CBAM) and mandatory Scope 1, 2 and 3 reporting standards adopted by multinational corporations.

“Even here at home, Budget 2026 introduced a carbon tax targeting high-emitting sectors such as iron, steel and energy. While SMEs are not taxed yet, compliance still matters for firms throughout the supply chain,” she said. 

Madelena said climate resilience is not only about managing physical and transition risks, but also about recognising the opportunities that climate-related shifts can create for businesses.

“Climate action is already creating new demand, as seen in the National Energy Transition Roadmap (NETR), which charts Malaysia’s path to net zero by 2050 and aims to mobilise RM1.2 trillion in investments while generating more than 300,000 green jobs.

“These opportunities are not limited to large corporations, as SMEs involved in solar installation, EV maintenance, green building materials and waste recycling stand to benefit directly,” Madelena said. 

She also said businesses should finance their transition, noting that building climate resilience is a long-term investment that can lower operating costs, open new markets and strengthen customer trust for early adopters.

“BNM has allocated RM3.8 billion in targeted (financing) such as the Low Carbon Transition, and the High Tech and Green (HTG) facilities, to help SMEs take steps to build climate resilience and make the most of the opportunities,” she said. 

-- BERNAMA