New Terrain: Sustainability in Malaysia

Technology is central to the country’s sustainability agenda. Malaysia’s commercial hub, Kuala Lumpur, has introduced a smart city plan, which includes accelerating digital transformation by focusing on education and promoting cloud and artificial intelligence (AI) technologies, among other areas. The Malaysian government has also emphasized investment in technology in its 2022 budget, with up to MYR 100 million (US$23.7 million) in grants for areas such as smart automation and at least MYR 30 billion (US$7 billion) for companies associated with the government. investment in renewable energy, supply chain modernization and 5G infrastructure.

In recent years, Kuala Lumpur has also seen an increasing number of “green” opportunities. For example, the city administration used the smart “City Brain”, which uses Alibaba Cloud computing systems to optimize services such as traffic control and even calculate the best routes for emergency services. International technology and mobility companies such as Microsoft and Korea-based Socar, which are eyeing green innovation and business opportunities, have also invested and expanded their operations in Kuala Lumpur. At the same time, traditional industries, especially energy and electronics, are trying to reinvent themselves.

In light of this changing environment, this report explores what global companies in Greater Kuala Lumpur are doing to achieve their ESG goals, the opportunities the location offers and how their local experiences can be applied globally.

The key findings of this report are:

Malaysia is committed to becoming a regional leader in decarbonisation. The country’s current master plan, which outlines its economic development until 2025, includes numerous programs aimed at improving sustainability by increasing renewable energy production capacity, developing green mobility solutions and building sustainable and resilient cities. This commitment to sustainability comes even as the country continues to derive economic growth from traditionally carbon-intensive industries such as oil and gas development, power generation and agriculture. Yet while some countries’ reliance on fossil fuels and other traditional industries strains their decarbonisation commitments, Malaysia is leveraging its deep, globally integrated industrial clusters and supply chains to develop new, greener business processes and less carbon-intensive manufacturing and logistics processes.

Greater Kuala Lumpur has seen an increasing number of “greening” opportunities. for some of the country’s traditional innovation clusters, especially energy, electronics manufacturing, IT outsourcing and other sectors of the digital economy. Asia’s fast-growing digital economies have also created unique synergies for digitally “native” firms looking to use Kuala Lumpur as a hub from which to tap into the region’s green business opportunities. These include Korean green mobility firm Socar, which is expanding its “people-to-people” ride-sharing model across Southeast Asia from its base in Kuala Lumpur. And Schlumberger, which has one of the seven global “Innovation Factori” centers in Kuala Lumpur. The center is working to accelerate the adoption of its AI to boost energy transition efforts in East Asia.

Malaysia’s sustainability maturation is creating a culture of monitoring, measurement and, ultimately, accountability. This can serve as a framework for ESG-oriented firms to chart their journeys. Such efforts are far from cosmetic, they are essential to the economic outlook of the market. Sustainability-minded global firms can achieve their ESG goals through their operations in Greater Kuala Lumpur and use the Malaysian experience as a template for sustainable innovation in their global operations. Malaysia’s role as a global hub for sustainability is critical, as its economy uniquely spans many industrial sectors, including high technology and energy generation, which are key to moving global development towards a low-carbon future. Collaboration and communication are essential to these efforts.

Download the full report.

This content was produced by Insights, the custom content arm of MIT Technology Review. It was not written by the MIT Technology Review editorial staff.

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