The perspectives of stakeholders on the effectiveness of green financing schemes in Malaysia

Raja Elyn Maryam Raja Ezuma; Nitanan Koshy Matthew; Raja Elyn Maryam Raja Ezuma; Nitanan Koshy Matthew

doi:10.3934/GF.2022022

Green Finance

2022, Volume 4, Issue 4: 450-473. doi: 10.3934/GF.2022022

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Research article

The perspectives of stakeholders on the effectiveness of green financing schemes in Malaysia

Department of Environment, Faculty of Forestry and Environment, Universiti Putra, 43400 UPM Serdang, Selangor, Malaysia

Received: 21 August 2022 Revised: 05 October 2022 Accepted: 02 November 2022 Published: 17 November 2022
JEL Codes: Q56

Growing concerns of climate crisis mitigation in Malaysia over the decades have created pressure for public listed companies and small and medium enterprises in the country to adopt a different approach in their business operations. Green financing schemes such as the Environmental,Social and Governance (ESG) indicator,the FTSE4Good index by the regulatory body Bursa Malaysia for public listed companies and the Green Technology Financing Scheme stemming from the National Green Technology Policy by the Malaysian Green Technology and Climate Change Centre,address the need to improve operations sustainably through financing. Based on interviews with government agencies and public listed companies,this paper presents the effectiveness of the guidelines and schemes in place from their perspectives. The value drivers,challenges and impact from adhering to the FTSE4Good index were discovered. Findings found that the government is a central player in ensuring the initiatives' effectiveness. Although there have been improvements over the years in the industry since its introduction,barriers are still lingering that may hamper the extent of the initiatives' effectiveness. Suggestions are made as a feedback mechanism for improved green financing towards Malaysia's aspiration on becoming a high-income nation by 2025 and in support of the Sustainable Development Goal 9: Industrial innovation and infrastructure. To realise that aspiration,every player in the industry plays a critical role in greener operations,including the small and medium enterprises.
- green financing,
- Environmental Social and Governance,
- Green Technology Financing Scheme,
- circular economy,
- public listed companies,
- government
Citation: Raja Elyn Maryam Raja Ezuma, Nitanan Koshy Matthew. The perspectives of stakeholders on the effectiveness of green financing schemes in Malaysia[J]. Green Finance, 2022, 4(4): 450-473. doi: 10.3934/GF.2022022

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Abstract

Growing concerns of climate crisis mitigation in Malaysia over the decades have created pressure for public listed companies and small and medium enterprises in the country to adopt a different approach in their business operations. Green financing schemes such as the Environmental,Social and Governance (ESG) indicator,the FTSE4Good index by the regulatory body Bursa Malaysia for public listed companies and the Green Technology Financing Scheme stemming from the National Green Technology Policy by the Malaysian Green Technology and Climate Change Centre,address the need to improve operations sustainably through financing. Based on interviews with government agencies and public listed companies,this paper presents the effectiveness of the guidelines and schemes in place from their perspectives. The value drivers,challenges and impact from adhering to the FTSE4Good index were discovered. Findings found that the government is a central player in ensuring the initiatives' effectiveness. Although there have been improvements over the years in the industry since its introduction,barriers are still lingering that may hamper the extent of the initiatives' effectiveness. Suggestions are made as a feedback mechanism for improved green financing towards Malaysia's aspiration on becoming a high-income nation by 2025 and in support of the Sustainable Development Goal 9: Industrial innovation and infrastructure. To realise that aspiration,every player in the industry plays a critical role in greener operations,including the small and medium enterprises.

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