The CMM will issue specialized ESG disclosure guidance for SMEs across five sectors

KUALA LUMPUR (May 23): Capital Markets Malaysia (CMM) will publish specialized disclosure guidelines for small and medium-sized enterprises across five sectors involved in global supply chains, according to the Ministry of Finance (MOF).

According to Finance Minister II Datuk Seri, the guidelines, which are an extension of the simplified Environmental, Social and Governance (ESG) guidelines introduced in 2023, will cover energy, transport and storage, construction and real estate, agriculture and manufacturing. Amir Hamzah Azizan.

“This will provide necessary guidance on the additional environmental and social disclosures expected of these sectors to remain competitive in the global supply chain and market,” the minister said in a speech read by Treasury Secretary-General Datuk Johan Mahmood Merican at the event Thursday.

The broader document, developed by CMM, an affiliate of the Securities Commission Malaysia (SC), will provide simplified and standardized ESG disclosure guidelines aimed at small and medium-sized enterprises (SMEs).

Disclosures will be in line with global and local ESG frameworks, including the Global Reporting Initiative, the International Sustainability Standards Board, the Bursa Malaysia Sustainability Reporting Guide and the Malaysian Code of Corporate Governance.

The initiative was announced as part of SC’s five-year plan for Micro, Small and Medium Enterprises (MSMEs) as well as Mid-Tier Companies (MTCs), unveiled on Thursday, titled Catalysing MSME And MTC Access to the Capital Market : 5-Year Action Plan (2024- 2028).

According to the action plan, the SC plans to help SMEs and MTCs raise RM40 billion from the capital market by 2028. The aim is to build capacity and create a visible and sustainable pipeline of high-potential SMEs and MTCs ready to raise funds in the capital market.

According to Amir Hamzah, apart from the guide, financial guarantor Credit Guarantee Corporation Malaysia Bhd (CGC) will analyze and discuss with more crowdfunding and peer-to-peer funding platforms to offer guarantees for its solutions.

This follows an additional RM30 million guarantee provided by CGC for working capital under a term loan through Funding Societies’ digital financing platform for financing up to RM500,000 launched in early May.

“We hope that more guarantee products will be able to be issued by the first half of 2024, which will further strengthen efforts to provide greater access to capital market financing,” said Amir Hamzah.

Additionally, the MoF urged the SC to revitalize the LEAP market by addressing two major challenges faced by MSMEs and MTCs, namely the high cost of raising funds and the lack of clear pathways to access the public market and move to senior management, he said.

“The goal is to have new LEAP Market solutions ready at the beginning of next year,” added Amir Hamzah.