INCEIF University and MATRADE Collaborate to Highlight ESG Compliance for SMEs

Kuala Lumpur, 20 Jan 2025 – INCEIF University, in collaboration with the Malaysia External Trade Development Corporation (MATRADE), hosted an insightful fireside chat to emphasise the critical role of Environmental, Social, and Governance (ESG) compliance for small and medium enterprises (SMEs) aiming to penetrate global markets.

The event brought together industry experts and SME representatives to share insights on leveraging ESG strategies to enhance market access, build trust, and achieve sustainable growth.

Moderated by Assoc Prof Dr Maya Puspa Rahman, Director of the Research Management Centre at ISRA Institute, the session featured three panelists:

  • Damian Santosh Samson, Deputy Director, ESG Unit, MATRADE
  • Assoc Prof Dr Ziyaad Mahomed, Lead Researcher, Centre of Islamic Social Finance, INCEIF University
  • Dr Imene Tabet, Research Fellow, ISRA Institute

The discussion highlighted the growing significance of ESG compliance, especially in developed markets such as Europe where regulatory requirements and consumer preferences increasingly favour sustainable business practices.

Mr Damian emphasised that ESG compliance served as a unique selling point for SMEs. He explained how adopting ESG principles could enhance market access, position businesses as attractive partners, and ensure adaptability to evolving international market demands. He noted that even small, incremental changes could pave the way for long-term success in responsible sourcing.

MATRADE actively supports SMEs in their ESG journey, whether driven by market access needs or a deeper understanding of its potential positive impact on their bottom line. Many SMEs have already implemented ESG measures, such as anti-bribery policies or solar panel installations, often without realising their full contribution to sustainability. MATRADE encourages SMEs to build upon these efforts and further progress along their ESG journey.

Assoc Prof Dr Ziyaad Mahomed discussed the role of social finance in addressing challenges such as greenwashing. He highlighted that social finance extends beyond charity by focusing on profit-driven initiatives that uplift communities and foster customer loyalty. By engaging in community-focused activities, SMEs can achieve sustainable growth while creating long-term value for both their business and society.

Dr Imene Tabet elaborated on the ESGi assessment tool, a comprehensive framework developed by INCEIF University in collaboration with Ficus Capital, the world’s first ESG-i venture capital firm. Launched last year, the tool helps micro, small, and medium enterprises (MSMEs) in Malaysia measure and enhance their sustainability efforts through a simple, holistic, principle-based approach aligned with national and global standards. The ESGi tool provides a gap analysis to identify areas for improvement and assess MSMEs’ readiness for ESG adoption. A key feature of the tool is its holistic approach, which includes Shariah compliance, making it particularly valuable for businesses pursuing ethical and sustainable growth.

Dr Imene encouraged SMEs to embrace ESG by following a simple approach: “(S)tart with what’s within reach, (M)aximise available tools from the government and financial institutions, and (E)ngage stakeholders to empower the sustainability journey.”

The panelists collectively agreed that implementing ESG practices can lead to significant cost savings by streamlining processes and improving resource efficiency. Businesses that adopt ESG principles not only comply with regulatory requirements but also enhance their operational efficiency, mitigate risks, and better adapt to the evolving international business landscape. As large multinational corporations set the pace, SMEs must keep up by gradually integrating ESG into their core strategies.

One of the key takeaways from the discussion was the need to address common misconceptions surrounding ESG implementation. The panel emphasised that ESG compliance did not have to be cost-prohibitive as SMEs could start with small, impactful initiatives and gradually integrate ESG into their long-term business strategies. Additionally, proactive ESG adoption ensures competitiveness and reduces the risk of falling behind in the rapidly evolving global market.

The session concluded with a call to action for SMEs to perceive ESG compliance as a strategic advantage rather than a mere obligation. By embedding sustainable practices into their operations, businesses can unlock new opportunities and establish themselves as responsible and forward-thinking market players.

 

Ends.