A dramatic shift is taking place in Malaysia’s small and medium enterprise (SME) sector, with ESG awareness skyrocketing from just 14% in 2023 to an impressive 80% in 2025—a sixfold increase. This is one of the key insights from Alliance Bank Malaysia Berhad’s newly released ESG 2.0 Report: The Path to Sustainable Impact – Sectoral Insights of Malaysian SMEs.
This groundbreaking report, developed in collaboration with Monash University Malaysia and Zurich Malaysia, and supported by UN Global Compact Network Malaysia & Brunei (UNGCMYB), SME Corporation Malaysia, Malaysian Green Technology and Climate Change Corporation (MGTC), and INCEIF University, underscores a strong shift towards sustainability-driven business models among SMEs.
Key Findings: ESG Becoming a Business Priority
- SMEs Embracing ESG at Record Rates: 60% of SMEs have already implemented ESG initiatives, up from just 28% in the previous year.
- Industry Leaders in ESG Adoption: The manufacturing sector leads the way with a 69% adoption rate, followed by the construction sector at 60%.
- Revenue Growth Linked to Sustainability: 38% of SMEs that adopted ESG practices reported revenue increases exceeding 50%.
- ESG as a Competitive Advantage: Key drivers for adoption include cost savings (53%), market demand (51%), and innovation, which is increasingly recognized as a critical business opportunity.
Alliance Bank’s 3As Strategy: Supporting SMEs on Their ESG Journey
As part of its commitment to sustainable business growth, Alliance Bank has expanded its 3As strategy—Advocacy, Advice, and Answers—to provide SMEs with the right tools, funding, and knowledge to integrate ESG into their operations. The Bank offers a range of financing solutions, including:
- Green financing options under Bank Negara Malaysia’s Low Carbon Transition Facility and High Tech and Green Facility.
- Preferential rates for sustainability initiatives such as solar panel installations and green mortgages.
- ESG capability-building programs in partnership with leading sustainability organizations to provide training, assessments, and roadmaps for SMEs.
The full report is available for download at https://www.alliancebank.com.my/Alliance/media/documents/ESG-Survey-Report-For-SMEs/ESG-2-Survey-2025.pdf
