Sustainability and ESG to Aid and Propel Malaysian SMEs In 2023.

Despite the ongoing geopolitical crisis and the lingering effects of the pandemic, ASEAN remains a competitive economic bloc. A recent business outlook study published in August 2023 paints a vivid picture of opportunities and challenges awaiting Malaysian SMEs.

ECONOMIC RESILIENCE
The year 2022 was marked by the shadow of high inflation and soaring operational costs, leading businesses to adopt stringent cost-cutting measures. An overwhelming 80% of Malaysian enterprises grappled with the impact of this inflationary surge. Operational costs surged for 62% of these businesses, with 53% experiencing higher raw material expenses and 40% witnessing profit reduction due to inflation. Encouragingly, nearly half of businesses anticipate a decrease in inflation over the next year and are focusing on productivity enhancement to counter its effects.

VISIONARY PRIORITIES
Against this backdrop of challenges, Malaysian businesses remain surprisingly optimistic, with more than 70% holding a positive outlook for 2023. Key priorities include cost reduction, new customer acquisition, and digital transformation over the next three years. Furthermore, sustainability has captured the imagination of 84% of businesses as they recognize the value of socially conscious and sustainable practices such as employee welfare and efficient resource utilization, despite only 39% having commenced their sustainability journey. Barriers such as potential cost hikes for customers and resource constraints have hindered progress.

THE DIGITAL FRONTIER AND BEYOND
Digitalization has emerged as a beacon of hope, embraced by 82% of businesses with 29% extending it across their entire operations. Top priorities for digitalization include marketing, sales, and customer service. Remarkably, nearly 60% of enterprises have witnessed success through digitalization with enhanced productivity, enriched customer engagement, and improved product quality. Although challenges such as the scarcity of digital skillsets among employees, high implementation costs, and concerns over cybersecurity persist, 72% of enterprises plan to bolster digitalization investments in 2023, underlining the conviction that digital transformation promises a net positive outcome. Additionally, supply chain management and expansion into international markets (particularly Southeast Asia) have taken centre stage in the strategic agendas of businesses. Consequently, nearly 80% of businesses express interest in leveraging cross-border digital trade platforms.

SUSTAINABILITY, SOCIAL RESPONSIBILITY, AND ESG WITH Q3
At Q3 Management Solutions Sdn Bhd, we underscore the critical importance of sustainability, social responsibility, and transparency in creating enduring value and fostering a better world. Our consultancy services, with a focus on Human Resources, Finance, and Corporate Governance, are strategically tailored to help your company navigate and mitigate the risks highlighted in this report.

Our team of experts stands ready to empower your company with the skills, tools, innovation, and knowledge needed to navigate the evolving national, regional, and global business landscape that are embracing ethical business practices and sustainability.

Preview of Our ESG Public Trainings
We also conduct public training on ESG this coming November 2023:              

1. Sustainability & ESG 101 Workshop (20-21 November 2023)

For more information about the training, you can click the link below:

https://drive.google.com/file/d/1immQZzNKcMBEXNLM_nB5TSCTdWrzf89E/view?pli=1