Asean Launches Innovative ESG Framework to Empower SMEs in Supply Chain Sustainability
The ASEAN Capital Markets Forum (ACMF) has introduced an innovative resource aimed at enhancing ESG (Environmental, Social, and Governance) reporting practices among SMEs (Small and Medium Enterprises) in Southeast Asia. This new tool, known as the Asean Simplified ESG Disclosure Guide (ASEDG) Version 1, was officially launched at the recent ASEAN Finance Ministers and Central Bank Governors Meeting, as reported by The Edge Malaysia.
Purpose of the Asean Simplified ESG Disclosure Guide
The ASEDG is designed to empower SMEs within ASEAN supply chains to effectively communicate their ESG practices to key stakeholders, including customers, investors, and lenders. By consolidating both global and regional ESG standards into 38 key disclosures, the guide offers a comprehensive framework for businesses to report their sustainability efforts.
Structure of the Guide
The disclosures within the guide are categorized into three distinct tiers, allowing businesses to report based on their level of sustainability readiness:
- Basic: Fundamental disclosures that all SMEs can provide.
- Intermediate: More detailed disclosures for businesses with advanced ESG practices.
- Advanced: Comprehensive reporting for fully sustainable enterprises.
Impact on ESG Adoption Among SMEs
The ACMF’s initiative aims to bridge the gap in ESG adoption, particularly for smaller businesses that often face challenges related to the complexity and costs of existing reporting frameworks. According to SC Executive Chairman Datuk Mohammad Faiz Azmi, this guide represents a significant commitment to fostering sustainable and inclusive growth throughout Southeast Asia.
Encouragement for Stakeholders
Datuk Mohammad Faiz Azmi emphasized the need for SMEs, investors, and stakeholders to leverage this guide as a catalyst for meaningful ESG adoption. He stated, “The commission, as the chair of the ACMF, is pleased to initiate the development of this guide as a valuable contribution to Malaysia’s ASEAN counterparts.”
Future Developments and Updates
To ensure its relevance and practicality, the ASEDG will be periodically updated to reflect changes in international ESG standards and will incorporate feedback from stakeholders across the region. The ACMF plans to conduct further consultations with ASEAN member states over the next six months to gather input.
The Importance of ESG Disclosure
This initiative comes at a time when ESG disclosure is increasingly becoming a critical requirement for investors, regulators, and consumers. Smaller businesses, which play an essential role in supply chains, are encouraged to adopt these practices to meet evolving expectations.
For more information on ESG practices, visit the UN Environment Programme Finance Initiative.
