Welcome Remarks for CMM-KASA engagement: "Supply Chain Sustainability: Advancing ESG Adoption Amongst Malaysian SMEs"
22 March 2022  |  By Datuk Zainal Izlan Zainal Abidin Chairman, Capital Markets Malaysia & Deputy Chief Executive Securities Commission Malaysia

Welcome Remarks
Datuk Zainal Izlan Zainal Abidin
Chairman, Capital Markets Malaysia &
Deputy Chief Executive Securities Commission Malaysia

Supply Chain Sustainability: Advancing ESG Adoption Amongst Malaysian SMEs

Tuesday, 22 March 2022
10am – 12 noon
A Virtual Engagement

Yang Berbahagia Dato’ Seri Dr. Zaini Ujang, Secretary General, Ministry of Environment and Water, Malaysia,

Ladies and gentlemen.

Assalamualaikum and a very good morning.


I would like to extend a warm welcome to all of you to this inaugural engagement marking the collaboration between the Ministry of Environment and Water, and Capital Markets Malaysia to provide capacity building support to Malaysian small and medium-sized enterprises (or SMEs) seeking to enhance sustainability practices within their businesses.


I also wish to thank the esteemed speakers for taking time from their busy schedules to share their expertise and experience in this webinar shortly.


For Capital Markets Malaysia (or CMM), this program forms an important component of a key priority for our Centre for Sustainable Corporations to advance the sustainability efforts of Malaysian public listed companies. As CMM continues supporting these companies in their sustainability journey, it is important to ensure that the SMEs – which form part of their supply chains – also move in tandem.

Ladies and gentlemen, 


Supply chain sustainability places focus on companies’ efforts to uphold environmental and societal values such as climate change, human rights and fair labour practices throughout their supply chain.  The goal is to minimize environmental harm from factors like energy usage, water consumption and waste management, while having a positive impact on the people and communities in and around their operations.


In recent years, customers, investors and governments have placed increasing pressure on companies to demonstrate greater environmental stewardship and social responsibility. The business case for sustainable operations is much stronger than ever and will become even more intense over time.


Large corporations seeking to meet enhanced sustainability requirements and standards, particularly those which have set Net Zero carbon targets, must rely on their supply chain and suppliers to follow suit.


A 2021 study by Standard Chartered revealed that by 2025, 78 per cent of multinationals (MNCs) will remove suppliers that endanger their carbon transition plan.


The study, which looks at the risks and opportunities for suppliers in emerging and fast-growing markets as large corporates transition to net zero, also found that MNCs expect to exclude 35 per cent of their current suppliers as they transition away from carbon.


More than two thirds of the 400 MNCs surveyed for the report indicated that, given that supply chain emissions account for an average of 73% of MNCs’ total emissions, tackling supply chain emissions is the first step in their net-zero transition pathway.


This represents both an opportunity and a risk to suppliers. The cost of inaction is extremely high: as large corporations race against the clock to achieve their net zero carbon ambitions, suppliers that do not support their emission reduction target, risk being replaced by those able to aid their transition.


Conversely, suppliers which take proactive steps to prioritise sustainability are in a better position to retain and attract these large corporate customers.


A sustainable supply chain therefore is good not only for People and Planet, but also for Profit as it supports long term business growth. It creates more partnership opportunities, increases operational efficiency, and raises the organisation’s profile and reputation.

 Ladies and gentlemen,


Under the Capital Market Masterplan 3 (or CMP3) covering the period 2021 to 2025, the strategic initiatives that will be undertaken, include the following:

  1. to enable funding to competitive businesses of all sizes and across every stage of their development; and
  2. to enable greater capital mobilisation to businesses that create value for (various) stakeholders of the economy.
14. These two strategic initiatives, alongside others that have been identified in the CMP3, will set a conducive landscape while providing ample opportunity for SMEs to transition their business operations towards meeting the needs and requirements under the global sustainability agenda.
15. For some SMEs, operationalising a sustainability plan may appear daunting, and it is indeed complex and highly challenging, but at the same time crucial and unavoidable. And do remember that the SMEs in turn would require their suppliers to similarly embrace the same agenda.

Having said that, the objective of our engagement today is to support the SMEs’ sustainability journey. Among the first steps is to acquire the practical knowledge such as understanding the data requirement that facilitates assessment, by existing and potential customers, on the SMEs’ state of readiness in becoming suppliers with sound sustainable practices.


In this regard, it is heartening to note that over 200 Malaysian SMEs have registered to attend today’s session, a clear testament to your commitment in developing sustainable practices within your organisations. I am confident that today’s workshop will be beneficial in setting you in the right direction towards attaining these objectives.


Before concluding my remarks, I would like to take this opportunity to thank Dato’ Seri Zaini Ujang and his team at the Ministry of Environment and Water, for this very key collaboration, and more importantly for their unwavering commitment on advancing Malaysia’s climate action objectives and supporting the private sector through initiatives such as this programme that we are launching today.


With that, I wish all of you a productive and insightful session.

Thank you.

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