DAMANSARA: Hong Leong Bank Bhd (HLB) is seeking to double the number of loans related to environment, social and governance (ESG) financing to small and medium enterprises (SME) in the next three to five years.
Head of SME banking Kevin Ng said to date HLB had approved close to RM2.7 billion.
He added that the time taken to achieve the target largely depended on the ESG framework that the government was going to launch supposedly by the end of this year.
The framework will help set a standard checklist for many companies including SMEs and facilitate the bank to achieve the target.
On the announcement by Investment, Trade and Industry Ministry (MITI) about the launch of ESG framework by end of this year, Ng described the move as an excellent initiative to iron out details and avoid confusion especially among SMEs regarding ESG.
"The problem is that a lot of people interpret ESG differently and having the framework in place in a way helps businesses determine the next step for them to enhance and accelerate their effort to explore their ESG capabilities.
"For HLB, it will certainly help us in ensuring that we are accountable from the sense of corporate social responsibility by making sure that we provide finances to companies that are ESG compliant," he told reporters at a roundtable on SMEs here today.
MITI senior director of iESG division Dr Meenachi Muniandy in the panel session said the ESG framework was expected to be launched in the third quarter of this year.
She said the framework would comprise four components namely standard, financing, capacity building, and market mechanism that help any business entities determine its level of ESG compliance. The framework would then suggest a guideline for the company to follow.
"The framework will help SMEs to advance further in their ESG journey as well as to assist them to do their sustainability reporting," she said.
The HLB sustainable roundtable series is an exclusive session organised in collaboration with Small and Medium Enterprises Association (SAMENTA).
The roundtable is part of HLB's continuous efforts to help SMEs gain knowledge to future-proof their businesses while integrating ESG considerations into their operations.
Ng said the goal was to gather all industry experts to share knowledge and best practices and collaborate to develop action plans.
"Our goal is to help SMEs stay ahead of the curve and make informed decisions that will benefit not just their businesses but also contribute to the sustainability agenda of the country,"he said.
SAMENTA chairman Datuk William Ng said the despite the challenges faced by the SMEs in implementing sustainable supply chain practices, engagements and support network with stakeholders was fundamental in facilitating SMEs to learn and exchange knowledge.
"Additionally, SMEs can take advantage of available resources, such as government incentives, certifications schemes and training programs to support the implementation of sustainable practices in their supply chain," he said.
