Report: 6 out of 10 Sarawak SMEs aware of sustainability issues, 66 pct implementing ESG practices
KUCHING (May 14): The Sarawak SME ESG Report has revealed that six in 10 small and medium enterprises in Sarawak are aware of sustainability issues, with 66 per cent already implementing environmental, social, and governance practices.
The Alliance Bank Malaysia Berhad report also found that among non-adopters, 98 per cent indicated a strong intention to adopt ESG measures, with 59 per cent of them are planning to act within the next two years.
According to the report, the leading motivators for SMEs to adopt ESG practices include meeting the evolving expectations of consumers, suppliers, and investors.
'Despite these positive trends, challenges such as limited resources, staffing constraints, and navigating various ESG frameworks were cited as key barriers to wider adoption,' the bank said in a press statement.
'The encouraging level of ESG awareness is the result of concerted efforts of government bodies, NGOs, and corporations in disseminating ESG-related information, and promoting sustainable business practices.'
Meeting market demand, along with the pursuit of cost efficiencies, has also driven ESG adoption among SMEs, said the report.
It said these efforts not only enhanced competitiveness but also unlocked access to new customer segments and expanded market opportunities.
The bank launched the inaugural report entitled 'Navigating ESG in Sarawak: Insights from SMEs' during the Hydrogen Economy Forum (H2EF) 2025 opening ceremony officiated at by Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg here yesterday.
The Sarawak SME ESG Report was developed through a comprehensive study conducted with the support of the Sarawak government, InvestSarawak, Monash University, and United Nations Global Compact Network Malaysia and Brunei.
Alliance Bank Group CEO Kellee Kam said delivering a Sarawak focused report is not just timely but essential as it provides a deeper understanding of the realities faced by local businesses.
'This enables us to identify both the challenges and the opportunities that lie ahead. The data gathered will empower businesses to make informed decisions while also serving as a benchmark that encourages the adoption of best practices across industries.
'We recognise the challenges that stand in the way. Many businesses face limitations in terms of resources, staffing, and clarity – especially when confronted with numerous frameworks and fragmented information,' he said.
Kam pointed out that access to financing remains another hurdle that must be addressed collectively.
'We hope that the report is able to provide critical guidance to SMEs, helping them build capacity and access useful tools and resources as they navigate their ESG journey,' he stressed.
Speaking on the research component of the report, Monash University Malaysia CEO, pro vice-chancellor, and president Prof Datuk Adeeba Kamarulzaman said: 'This initiative brings together government, academia, industry, and civil society, underscoring the collective effort needed to advance sustainability.
'The research component of this collaboration involves a statewide study that offers critical insights into ESG practices among SMEs. The findings support the development of policies and strategies that help SMEs integrate ESG principles, enhancing their resilience and competitiveness while contributing meaningfully to Sarawak's sustainable and inclusive growth.'
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