Esg Compliance No Longer Optional Malaysian Businesses Mustn T Fall Behind

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From Rahman Hussin
It’s time for a reality check: environmental, social and governance (ESG) compliance is no longer a luxury or something that businesses can ignore. It is a fundamental expectation. Regulators, investors, and customers aren’t just asking for sustainability – they’re demanding it.
And yet, many Malaysian companies are still treating ESG like a far-off goal, something to be addressed “later”. This hesitation isn’t just risky; it’s a direct path to falling behind in a world where sustainability is quickly becoming non-negotiable.
Around the world, companies are embracing ESG as a cornerstone of modern business, making real changes to position themselves for the future. But here in Malaysia, too many businesses are still stuck in the past, approaching ESG with the bare minimum investment or relying on outdated, manual systems that barely keep up with what’s required.
ESG compliance isn’t just about ticking boxes; it’s about staying competitive in a rapidly changing market. If companies keep resisting the change, they’ll find themselves left in the dust.
Let’s address the costs head-on. Many companies argue that ESG compliance is expensive, a drain on resources that they’d rather spend elsewhere. But in reality, the biggest cost isn’t in doing ESG – it’s in not doing it. Not investing in ESG is a shortcut to losing investor trust, customer loyalty and market relevance.
While companies complain about compliance costs, they’re wasting far more by clinging to inefficient, outdated methods. Worse still, the technology to streamline ESG reporting and make it affordable already exists, but without the commitment to adopt it, companies are bleeding resources with little to show for it.
And this brings us to another excuse: data collection. Many businesses say they don’t have the tools or systems to collect reliable ESG data.
The reality? In today’s digital world, that’s just not an acceptable excuse. The technology is out there, with automation and real-time tracking options readily available to help companies gather accurate data quickly and easily.
Ignoring these tools is a choice to remain stuck, to miss out on what ESG can do for the business. The companies that aren’t investing in digital infrastructure are willingly putting themselves at a disadvantage in a world that expects transparency and accountability.
If we’re being honest, the evolving standards of ESG compliance can feel overwhelming. It’s true that companies are balancing the requirements of Bursa Malaysia with international frameworks like the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB).
And yes, it’s complex. But companies around the world are meeting these standards – and using regulatory complexity as a reason to delay change isn’t good enough anymore. Malaysian companies that aren’t willing to align with these standards are showing the world that they’re unwilling to compete globally, and that’s a tough signal to send in a connected, international marketplace.
The issue of carbon emissions is also becoming impossible to ignore. Across global markets, businesses are setting decarbonisation targets and taking steps to meet them, but here at home, many Malaysian companies are still struggling just to get the basics right.
For SMEs, accessing carbon credit markets may feel like an impossible goal, but it’s clear that inaction isn’t an option. Companies of all sizes, especially larger corporations with resources at their disposal, need to start prioritising emissions tracking and reduction. Otherwise, they risk losing partnerships, financing and credibility in a world where climate action speaks volumes.
Ultimately, the hesitation to act on ESG reflects a deeper cultural resistance to change. Real ESG compliance requires a shift in thinking and a commitment to doing things differently.
But many Malaysian companies still see ESG as a nuisance or a regulatory burden rather than an opportunity to build value. This attitude is outdated, and companies that continue to ignore it will soon find themselves on the wrong side of progress.
ESG is not a trend; it’s the new standard. Companies that think they can get by without it are in for a rude awakening because “business as usual” is no longer an option.
The time for delay and excuses is over. ESG compliance is a critical part of doing business today, and companies need to stop treating it like a checklist item. There are tools, resources, and support systems available, but they won’t make a difference unless businesses make the choice to act.
ESG isn’t just a burden – it’s a chance to innovate, build resilience, and stay relevant in an era where sustainability is key to success. Companies that don’t embrace this change will be left behind.
This is the wake-up call. Malaysian companies need to stop resisting, get serious about digital ESG solutions, and commit to real change. The cost of inaction is far too high, and the window to catch up is closing fast. The future is sustainable, and companies that aren’t on board are quickly running out of time. - FMT
Rahman Hussin is a senior partner at business consultancy, Agyl & Partners. He is an FMT reader.
The views expressed are those of the writer and do not necessarily reflect those of MMKtT.

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