MIDA expects more ESG-related investment this year
02 Aug 2022
The Malaysian Investment Development Authority (MIDA) expects more Environmental, Social and Governance (ESG) investments to be secured this year, helping the country’s overall investment target for 2022 to be achieved.
MIDA chief executive officer Datuk Arham Abdul Rahman said the ESG investments not only involved new foreign direct investments (FDI) and domestic direct investments (DDI), but expanded investments from existing companies in Malaysia.
“I am not only referring to the new investments that will be coming to Malaysia, but also companies that are already operating here. Multinational corporations (MNCs) that are already operating in Malaysia have to ensure that when they export back their products, they have to be ESG-compliant.
“We are here to support these MNCs in order for them to be ESG-compliant. We want to put in place all the policies, facilitation, and support to ensure that Malaysia is ready to host new greenfield investments coming in for the next few years,” he told the media after a MIDA networking event and panel session on Malaysia’s ESG agenda, in line with the National Investment Aspiration (NIA).
Last year, Malaysia approved 889 green technology and green efficiency projects with an investment value of RM3.7 billion.
From January 2022 to March 2022, the government through MIDA has successfully approved 212 green technology projects and services activities amounting to RM433 million.
From 2001 to March 2022, MIDA approved investments related to green projects and green services amounting to RM35.5 billion with 3,186 projects in total.
In his welcoming remarks, Arham said the green technology incentives have been well received since their launch in 2014.
“The extended Green Investment Tax Allowance (GITA) and Green Income Tax Exemption (GITE) until December 2023 have continued to receive overwhelming responses from the industrial and commercial sectors.
“As such, companies are encouraged to invest in harnessing renewable energy (RE) sources, including solar, biomass, biogas, and mini-hydro, to use energy efficiency (EE) equipment and qualifying green services,” said Arham.
He added that there are many untapped opportunities for services related to RE, energy efficiency, electric vehicles (EV) support services such as services for EV charging stations, operation of EV charging stations and maintenance, repair and overhaul of EVs, green buildings, green data centres, green certification and verification, and green townships, to name a few.
Commenting on the 2021 investment performance where Malaysia achieved RM306.5 billion in approved investments, Arham said it was mainly due to electrical and electronic products (E&E) and semiconductor players ramping up their production.
“They increase their investments to meet the shortage of supply because of the increasing demand due to COVID-19.
“Last year was a very exceptional year because of the big projects in the semiconductor and E&E sectors. Nevertheless, this year I am very optimistic that the number of FDI investments in total for the whole of 2022 will still be a good number,” he said.
Meanwhile, the United Nations Global Compact Network Malaysia & Brunei director of programmes Shanta Helena Dwarkasing said sustainability is imperative to a country that wants to be globally competitive and attractive.
“Many European and ASEAN countries showed their commitment to climate pledges with proactive measures, as ESG will be a value-add that investors are looking for.
“Hence, we can expect Malaysia, especially with more companies such as small and medium enterprises (SMEs), to embrace ESG standards,” she said during the panel session.