NIMP 2030 highlights the importance of ESG

Thursday 28 Nov 2024

NIMP2030

KUALA LUMPUR (Sept 4): One of the six goals of the New Industrial Manufacturing Plan (NIMP) 2030 that was released last Friday (Sept 1) is to enhance ESG (environment, social and governance) practices in Malaysia’s manufacturing sector.

This is meant to de-risk the economy against ESG factors, increase Malaysia’s attractiveness as an investment destination, and ensure Malaysia’s exporters enjoy continued access to ESG-sensitive markets.

Additionally, by driving green manufacturing practices and transitioning towards net zero emissions, Malaysia can position itself as a leader in green solutions and develop new growth sectors.

A total of 10 action plans and three mission-based projects were identified in the NIMP 2030 in relation to this goal.

The action plans include accelerating the transition towards sustainable practices, especially in sectors that find it hard to reduce emissions, such as cement, metal, chemical and petroleum.

Decarbonisation pathways will be co-developed with industry players, and sectoral emissions levy for hard-to-abate sectors will be explored, among other matters.

A carbon policy will be introduced, which sets mandates and guidelines for a carbon accounting model to guide industry players to report their carbon emissions. It will also enable the implementation of a carbon pricing mechanism such as carbon taxes.

Meanwhile, an iESG framework is expected to be introduced to support manufacturing firms to adopt ESG practices. The framework will be aligned with ongoing global reporting standards and aided by tools such as the Simplified ESG Disclosure Guide for SMEs by the Securities Commission Malaysia and Capital Markets Malaysia.

More schemes to encourage energy efficiency and the adoption of renewable energy will be introduced.

The trend towards ESG globally presents opportunities for growth, which the NIMP 2030 also covers.

Three action plans were highlighted in the document, covering the EV (electric vehicle) ecosystem, carbon capture, utilisation and storage (CCUS), and a circular economy framework for the industry.

Projects identified under these plans include launching locally-manufactured EVs and deploying large-scale CCUS solutions.

The circular economy framework entails a shift away from the “take-make-dispose” model, in which raw materials are exhausted and waste produced. Instead, in a circular economy, “waste” is reused and recycled, and less raw materials are used.

Lastly, to shift towards green infrastructure, NIMP 2030 describes the transformation of industrial estates into eco-industrial parks that can reduce greenhouse gas emissions and the amount of waste and natural resources used. Principles of the circular economy are a central component of these parks.

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