Green economy push
Source: The Star
PETALING JAYA: As corporate Malaysia jumps on to the green economy bandwagon to bolster its economy going forward, there are areas that need to be fine-tuned to boost growth and minimise "greenwashing".To minimise "greenwashing" and fuel sustainability practices, experts are urging, among others, to further forge close cooperation between the government and the private sector to ensure only clear and consistent policies are implemented.
Greater awareness on the importance of sustainability should also be embedded through education and upskilling the workforce, and providing incentives for the adoption of green technologies and practices, they said.
The green economy, at the same time, they said would create new jobs and attract new investments, a boon to the country's growing economy.
According to HSBC global head of environmental, social and governance research and head of the climate change centre of excellence Wai-Shin Chan, there is a lot of policy under discussion in Malaysia on the green economy.
However, it is the implementation of this policy that would drive low carbon and sustainable development, he said.
HSBC global head of ESG research and head of the climate change centre of excellence Wai-Shin Chan
Wai told StarBiz that "more awareness of sustainability in the country through education, in tandem with upskilling the workforce, would be a boon to overall economic growth, in our view.
"Although Malaysia is quite advanced in its green thinking relative to other Asean members, cooperation and integration with members would also be beneficial as the region moves towards a low-carbon future together.
"The green economy, broadly considered as the goods and services that can help a country transition towards a lower carbon and sustainable economy, is making a good impact in Malaysia, but there is still more work to do.
"The country has been visibly working towards changing all parts of the economy to be more sustainable, and this positions it well to take advantage of the growing global and regional green economy."
As the global green supply chain grows, Chan said Malaysia's strong record of higher-tech manufacturing, and the increasing use of lower carbon sources of energy in the electricity mix, should lend itself well to take advantage of future demand for greener goods as more products can be made lower carbon, including goods right across the value chain from finished goods to raw materials.
OCBC Bank (M) Bhd managing director and head of wholesale banking Jeffrey Teoh Nee Teik, meanwhile, said there is room for Malaysia to expand its green economy further.
In terms of policy support and initiatives, he said the government is headed in the right direction and can be expected to continue its good work of providing policy support and incentives to encourage the adoption of green technologies and practices.
This includes tax incentives, grants, and subsidies for businesses and individuals investing in renewable energy, energy efficiency, and sustainable practices.
Clear and consistent policies can provide a stable and conducive environment for the growth of the green economy, he stressed.
OCBC Bank (M) Bhd managing director and head of wholesale banking Jeffrey Teoh Nee Teik"Access to sustainable financing is vital for the growth of the green economy. Malaysia can establish dedicated funds and financial mechanisms to support green projects and businesses. Bank Negara has been instrumental in encouraging financial institutions to prioritise green investments and providing incentives and guidelines for sustainable financing.
"The green economy presents a unique opportunity for countries to address environmental challenges while promoting economic growth and social well-being," Teoh noted.
He said the green economy is steadily gaining traction in the country, adding that supportive government policies such as the Green Technology Master Plan and national strategies like the National Energy Transition Roadmap (NETR) and New Industrial Master Plan 2030 are spurring wider-scale development of renewable energy (RE) have contributed to this growth.
Along with this, Teoh said consumer demand and growing awareness among Malaysians on environmental issues and sustainable practices are paving the way for more eco-friendly products and services. "We are confident that early adopters of green practices will thrive further in a green economy, " he said.
Economist Geoffrey Williams
However, veteran economist Prof Geoffrey Williams said Malaysia is benefiting from the green economy but not in the way it is often presented.
"The push for electric vehicles and solar panels, for example, makes very little difference in Malaysia but the demand overseas benefits Malaysia because of the rare earth resources here used in these technologies, for batteries for example. Malaysia benefits from the natural resources it has which can be extracted and sold generating huge potential income," he said.
He said the NETR would raise the production of green energy but this exceeds the energy requirements of Malaysia, so this excess would be sold in other markets such as Singapore. So again Malaysia makes money from the green demand overseas.
Williams said the extra money generated from green technology sales in rare earth metals and RE offers a similar money source as oil and gas and palm oil. This can be used for investment and development to boost economic growth, he noted.
Furthermore, Williams said the adoption of green economy products and services is largely irrelevant to Malaysia, especially to low-income groups. This is why adoption rates are low, he said, adding that conventional products, services and technologies are better, cheaper and economically more viable.
He felt that the economic case for green technologies, products and services has not been made which is why adoption rates are low everywhere. Malaysia is not so different in this respect, he said.
Concurring with Teoh, UCSI University Malaysia associate professor of finance Liew Chee Yoong said to enhance the effectiveness of the green economy, Malaysia can increase the demand for green products or services and ensure more robust governmental policies and incentives to support green businesses, he said.
UCSI University Malaysia associate professor of finance Liew Chee Yoong
"The progress towards the green economy in Malaysia is a promising step towards achieving greater economic sustainability.
"Continuous support and commitment from both the government and the private sector are crucial to maintain momentum and achieve long-term environmental and economic benefits.
"However, the government needs to control the issue of "greenwashing" whereby firms may not practise what they communicate to the public about their green commitments. The government itself also should not engage in greenwashing as well," Liew, who is also a research fellow at the Centre for Market Education, said.
Deloitte Malaysia governance, regulatory and sustainability services leader Kasturi Nathan said the initiatives to support the green economy are currently more accessible to large companies as they are not constrained by limited financial resources as well as organisational and human capital barriers.
As the country progresses towards its carbon neutrality goals, she said it is important to upskill and uplift industry players in the small and medium enterprise market segment so that they can also benefit from the outcomes of the green economy.
"With active participation from all industry players, we will be able to unlock the social and economic potential in the green economy while managing our carbon impact simultaneously.
"Integrated efforts from both government and corporate leaders towards achieving a common goal is essential to enable the growth of the green economy. Navigating the changing market and regulatory landscape requires a just transition, and stakeholders need to strategically prioritise current and future opportunities to ensure sustainable growth is attainable," she noted.
In comparison with its Asean counterparts in the green economy space, Kasturi said in terms of the economic size and top emissions emitters across the six Asean countries, Singapore is certainly leading the development of the green economy.
With the introduction of industry specific low-carbon regulatory policies, more stringent compliance requirements, as well as strong corporate commitments, she said Malaysia is on track to achieve its interim targets and is making encouraging progress in the green economy compared to its Asean counterparts.
Deloitte Malaysia governance, regulatory and sustainability services leader Kasturi Nathan
"Like other Asean members, we are still heavily reliant on fossil-fuel based energy as our main source of energy production.
"However, more investments are being channeled towards the development of renewable and environmentally friendly alternatives such as solar, green hydrogen, and bioenergy. Malaysia's green economy development is supported by key enablers from both regulators and industry players, she said.
In comparison with its Asean neighbours, Liew said Malaysia is progressing towards the green economy but may still be catching up with some of its regional counterparts. The focus of the government should be on sustainable development to match regional developments, he said.