Budget 2022: What People Say

Kuala Lumpur, Nov 2: The 2022 Malaysian national budget which was announced last week had placed strong emphasised on initiatives aimed at supporting financial and economic COVID-19 recovery among the B40 group.
The country’s ESG (environmental, social and governance) goals aligned with many of the UN’s 17 Sustainable Development Goals dealing with poverty, hunger, health and wellbeing, clean water and sanitisation, decent work, economic growth and reduced inequalities.
The growing allocation towards sustainability in the 2022 national budget reaffirms Malaysia’s commitment toward a sustainable future with the only remaining goals being building a sustainable economy.
Leadership in sustainability is directly linked to a country’s ability to create enduring value and build long-term resilience, which begins with government and institutional support.
Among the initiatives in the budget toward sustainability, the government announced a voluntary carbon market, a RM1 billion fund to help SMEs transition to low-carbon, more green tax initiatives and promotion of electric vehicles (EV) to encourage business leadership to adopt ESG goals.
Based on the recent announcement, several individuals shared their views on the national budget’s allocations.

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Mustamir Mohamad
Sime Darby Berhad Group Chief Financial Officer

With the global push towards ESG, Budget 2022 reinforces the need for Malaysian companies and the local supply chain to adopt ESG frameworks premised on higher value creation. This would also resonate with international investors who increasingly demand more robust ESG strategies, potentially attracting higher-value investments.
Sime Darby Berhad operates responsibly by balancing our economic aspirations with our environmental, social and governance obligations. We believe that our focus on sustainability not only strengthens our social licence to operate, but also enhances our ability to run our businesses efficiently, competitively into the future.
The tax incentives announced in Budget 2022 to spur Electronic Vehicle (EV) adoption are important next steps following the introduction of Malaysia’s Low Carbon Mobility Blueprint in the 12th Malaysia Plan. By providing individual tax relief for the purchase and installation of EV charging facilities, and tax exemptions for EVs, the government has demonstrated its commitment to taking a more holistic approach to developing the EV industry. Sime Darby has expertise that encompass the entire value chain of the EV ecosystem, from assembly to charging equipment and infrastructure, and these incentives support our own aspirations to becoming the leading EV player in the Asia Pacific region.

Pauline Ho
Chief Strategic Operations Officer and Net Zero Lead Partner at PwC Malaysia

We can see greater allocations being committed to encourage the right ESG behaviours. Formulating comprehensive plans can drive value across all sectors and set clear direction for the industries.
The allocation of the RM1 billion fund to help SMEs reduce their carbon footprint supports a Just Transition pathway for Malaysia, in helping SMEs in our supply chain to respond to the ESG agenda. Investors and stakeholders are scrutinising various supply chain sustainability aspects of businesses, from carbon emissions to diversity and inclusion, be it gender, race, age or ability. While larger businesses lead in ESG practices, relatively smaller businesses are beginning to pivot as they endeavour to meet growing customer demands in those aspects. In our role leading the capacity building workstream in the CEO Action Network (CAN), PwC is working with CAN members to upskill SMEs in their value chain, while encouraging them to adopt ESG practices.
From a regulator’s standpoint, multiple institutions including the Carbon Disclosure Project, Climate Disclosure Standards Board, Global Reporting Initiative and Value Reporting Foundation are coming together to identify commonalities and where possible, unify reporting standards in an attempt to reduce complexity and confusion amongst relevant stakeholders.

Karina Nor, BFP FCA
ICAEW member and International Sustainability Speaker

The empowerment of women’s participation in the economy is a positive impact of Budget 2022 towards gender equality. The mandatory appointment of female board representation in public listed companies which not only improves corporate governance and performance but signals a shift towards a more inclusive and diverse Malaysian corporate culture.
Another key initiative is the Voluntary Carbon Market, to be launched by Bursa Malaysia, a platform for carbon credit trading to support transition towards a low carbon economy. However, this must be supported with improved regulations in sustainable accounting and reporting and other incentives to encourage participation by corporations.
The world is moving towards a low carbon economy and large multinational corporations have begun to embrace this to remain competitive and attract talent. The expectations of investors will also change as ESG values become internalised by venture capitalists and institutional investors. Financial institutions will demand for companies to meet new ESG based criteria in lending, insurance and investing practices. Malaysian corporations have no choice but to embrace these changes through education and adopting sustainable best practices.

Loh Wei Yuen
Head of ICAEW Malaysia

ICAEW has been a long-time advocate of sustainability and we view it as not merely a corporate social responsibility but also as good financial sense. ICAEW is also the first major international professional body to announce our commitment toward carbon neutrality. For Malaysia, we are happy to see that the allocation for sustainability in Budget 2022 is headed in the right direction. As we have always been aligned with various professional bodies, we are in full support of MIA’s recommendation for increasing the tax relief for professional development, upskilling, accountancy, finance and ESG, to drive this important agenda. These are key moves that could spell more progress for sustainable development and empower businesses to make more future proof ESG commitments and subsequently grow to be more financially resilient. Ultimately, it is about making sure business models are aligned to the future and are future proof.
All members agreed unanimously that many Malaysian companies have already begun to embrace sustainability and are on the right trajectory. However, they also agreed that more must be done to integrate ESG practices into decision-making processes to ensure that organisations thrive financially while creating value for the Malaysian society, environment and economy.
Sustainability is no longer just a highly topical issue for activist investors and non-governmental organisations. It is in the spotlight for policymakers, regulators and businesses who are integrating these measures into their core strategies. Now is the time to make the decisive step towards global standard-setting for the benefit of all.

Suk Hua Lim, Country Manager of Palo Alto Networks for Malaysia
Suk Hua Lim, Country Manager of Palo Alto Networks for Malaysia

Suk Hua Lim
Country Manager of Palo Alto Networks for Malaysia

Palo Alto Networks applauds that Budget 2022 continues to comprehensively build on Malaysia’s efforts to rebuild national resiliency and boost support for economic reform. The unprecedented situation caused by the pandemic in recent two years has severely impeded overall global economic activities, as we now are in the recovery phase. It is exciting to see the Government embarking on a series of economic stimulus measures which allocates more than RM30 billion to improve Malaysia’s 5G connection and more than RM 2.5 million to digitalise SMEs.  Against a backdrop of strong economic recovery and fundamentals we also applaud the Government for its target of allowing 80 per cent of cloud storage usage to government services for its MyDigital initiative.
Malaysia transforming and expanding quickly into a digital economy, and Palo Alto Networks poised and committed to protecting organisations across clouds, networks and devices in order to increase business resilience to the road of economic recovery. 
Cyberattacks continues to rise especially due to the migration to hybrid workforce. Hence, cybersecurity is an imperative, not an IT issues. There is an urgent need for businesses to ups-kill their workforce and strengthen cybersecurity posture in order to safeguard their environment. As the global cybersecurity leader, we look forward to collaborations with local and international partners, public-private partnership with cybersecurity experts, as Malaysia continues on the journey towards a digital and high-income nation.   

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