Speech by YAB Tuan Chow Kon Yeow, Penang Chief Minister cum Chairman of Penang Green Council on the 21^st of November 2023 at Olive Tree Hotel:

Ladies and gentlemen, distinguished guests, and fellow participants.

Good afternoon to all of you!

I am honoured to stand before you today at the Penang ESG Conference & Exhibition to discuss a topic of immense pertinence – Environmental, Social, and Governance, or what many of you here today refer to as ESG. This conference serves as a crucial platform for us to share insights, exchange ideas, and collectively chart the course for a more sustainable and responsible future for Penang, the nation, and beyond.

In recent years, ESG principles have transcended corporate boardrooms to become a global movement, shaping the way businesses are conducted, how investment decisions are made, and how we address the pressing challenges of our time. At its core, ESG represents a commitment to sustainability, ethics, and accountability. It embodies the notion that businesses should be responsible and contribute positively to the world while seeking profits.

Ladies & Gentlemen,

Since the 70s’, Penang has strengthened its reputation as a desired international trade and investment destination, particularly in the electrical and electronic sector (E&E). According to the Malaysian Investment Development Authority (MIDA) in 2022, Penang had garnered a staggering RM13.7 billion in approved manufacturing investments, which is equivalent to 16 percent of Malaysia’s total manufacturing investments. Subsequently, creating over an estimated 15,752 new job opportunities from 135 projects. Such attainability can be attributed to our strategic location, investment-friendly policies, skilled workforce, well-developed infrastructure, and supportive business ecosystem. As a result, Penang has punched above its weight to become the second-highest contributor among all states, drawing in active participation from new and existing investors after building upon 50 years of industrial excellence and leadership.

Aligned with Penang’s Unity Manifesto 2023, it is crucial for local SMEs to consider embracing ESG. Not only because of its increasing significance within an operation of an enterprise but also its contribution to the state’s economy through the encouragement of high impact investments and development. Projects such as the Penang Silicon Island has adopted ESG principles through its designs to attract diverse investments and to position Penang as an ESG compliant centre of Malaysia. Penang’s unwavering commitment to ESG principles does not only bolster our status as a hub for international trade but also positions us as a trailblazer in the burgeoning green economy. This, in turn, can attract more businesses and foster collaborative opportunities for sustainable economic growth and development.

Adopting ESG principles by companies proves favourable for both investors and customers due to their perceived social and environmental responsibility. Consequently, this would allow them to become comparatively better in the market  as well as their prospects for long-term financial growth. Hence, ESG principles plays a pivotal role within the supply chains, enabling the creation of a positive environmental impact and contributing significantly to the manufacturing sector. Nevertheless, SMEs would still need all the support and guidance they could get from the government as well as private sectors. Most importantly, ESG also needs to be understood by SMEs as an opportunity rather than a risk.

Ladies & Gentlemen,

The ‘E’ in ESG emphasises the importance of environmental sustainability. It is the heartbeat of our commitment to a sustainable future. The very essence of our environment is in peril, threatened by climate change, habitat destruction, and pollution. To our natural surroundings, ESG is a pledge. It’s a promise to reduce our carbon footprint, to promote renewable energy, and to advance our conservation efforts. Thus, showcasing our commitments to sustainable practices that will preserve our environment and safeguard the biodiversity of Penang.

We can preserve and ensure the sustainability of Mother Earth and her treasures for generations to come. By favoring environmentally-conscious suppliers who puts sustainability at the forefront, businesses can actively reduce their environmental footprint. In today’s climate, it is imperative that all businesses and corporations acknowledge the pertinence of ESG and work collectively towards a common goal. Today, Malaysia has taken significant strides to promote ESG and sustainable development through diverse efforts, in terms of policies and initiatives. However, there remain room for improvements, especially policy implementation and enforcement at the corporate level.

As governments and regulators progressively ushers in policies and regulations that promote sustainability, small and medium-sized enterprises (SMEs) must adapt to these requirements to ensure long-term sustainability and continuity. Of course, the path to ESG excellence will see challenges, for example, facing resistance to change, financial constraints, as well as complex regulatory issues. Nonetheless, these hurdles should not deter us. Rather, they should be perceived as catalysts for innovation and growth.

As the saying goes, “The best time to plant a tree was 20 years ago; the second-best time is now.” We need to act now. The success of our ESG initiatives will depend on collaboration, not only between the public and private sectors but also with the civil society groups, non-governmental organisations, and the global community. We have much to learn from each other’s experiences and best practices.

Our objective, ladies & gentlemen, is to empower and assist existing and upcoming corporations, SMEs, and supply chains in the establishment of a conducive sustainable ecosystem. Such ecosystem must be parallel with customer expectations while ensuring compliance with regulatory demands. Therefore, I am delighted to extend our invitation to all MNCs, LLCs and PLCs here today, to work collectively with the Penang State Government on ESG-related programmes such as the Penang Green Industry Programme, spearheaded by the Penang Green Council (PGC), as well as other government initiatives.

Together let’s harness innovation, exchange ideas, and contend the current ecosystem for a better tomorrow. With this, I wish everyone a fruitful session at the ESG Conference and Exhibition today.