ESG Compliance – Challenges For MSMEs in Malaysia

As Malaysia now facing many problems like high living cost, unemployment, natural disaster, corruption and high crime rate, adopting Environment, Social and Governance (ESG) standards and practices is a must by every business entity. For large company like public listed companies (PLCs), complying with ESG not a huge problem due to their size and nature of business that directly impact the ESG elements. However, Micro, Small and Medium Enterprises (MSMEs) find difficulties to meet ESG rigorous standards due to lack of fund, expertise, and knowledge. Besides, it is not feasible for them to meet all the requirements due to their small size and narrow nature of business. Thus, the objective of this paper is to discuss the problems and challenges faced by MSMEs to adopt ESG at every level of their business operations.