Technology is at the heart of the country’s sustainability agenda. Malaysia’s commercial center, Kuala Lumpur, has been rolled out smart city plan, including accelerating digital transformation by focusing, among other things, on education and promoting cloud technologies and artificial intelligence (AI). The Malaysian government has also emphasized technology investment in its Budget 2022with up to MYR 100 million (US$23.7 million) in grants for areas such as smart automation and at least MYR 30 billion ($7 billion) for government-affiliated companies investing in renewable energy, supply chain modernization and 5G infrastructure .
In recent years, Kuala Lumpur has also seen an increasing number of ‘greening’ opportunities. For example, the city council has a smart “city brain”, which uses Alibaba Cloud’s computer systems to optimize services such as traffic control and even calculate the best routes for emergency services. International technology and mobility companies such as Microsoft and Korea-based Socar, seeking green innovation and business opportunities, have also invested and expanded their operations in Kuala Lumpur. At the same time, traditional industries, especially energy and electronics, have tried to reinvent themselves.
In light of this changing environment, this report examines what global companies in Greater Kuala Lumpur are doing to achieve their ESG goals, what opportunities the location has to offer, and how their local experiences can be applied globally.
The main findings of this report are:
Malaysia aims to become a regional leader in decarbonisation. The country’s current master plan mapping economic development through 2025 includes numerous programs aimed at advancing sustainability by increasing renewable energy generation capacity, developing green mobility solutions and building sustainable and resilient cities. This sustainability commitment comes even as the country continues to derive economic growth from traditionally carbon-intensive industries, such as oil and gas development, energy production and agriculture. But while some countries’ reliance on fossil fuels and other traditional industries weighs on their low-carbon commitments, Malaysia is leveraging its deep, globally integrated industry clusters and supply chains to develop new, greener business processes and less carbon-intensive manufacturing and logistics processes.
Greater Kuala Lumpur has seen an increasing number of ‘greening’ opportunities for some of the country’s traditional innovation clusters, especially energy, electronics manufacturing, IT outsourcing and other sectors of the digital economy. Asia’s burgeoning digital economies have also created unique synergies for digitally “indigenous” companies looking to use Kuala Lumpur as a hub from which to capitalize on green business opportunities in the region. These include Korean green mobility company Socar, which is expanding its “people-to-people” ridesharing model in Southeast Asia from its base in Kuala Lumpur. And Schlumberger, which has one of seven global ‘Innovation Factori’ centers in Kuala Lumpur. The center is working to accelerate the adoption of its AI for driving energy transition efforts in East Asia.
Malaysia’s maturing sustainability stance creates a culture of monitoring, measurement and, ultimately, accountability. This can serve as a framework for ESG-focused companies to map their own journeys. Such efforts are far from cosmetic, they are essential to the economic prospects of a market. Global sustainability-focused companies can both achieve their ESG goals through their operations in Greater Kuala Lumpur and use their Malaysian experience as a template for sustainable innovation in their global operations. Malaysia’s role as a global sustainability hub is critical as its economy uniquely spans many industrial sectors, including advanced technology and energy production, which are crucial in shifting the world’s development towards a low-carbon future. Collaboration and communication are essential in this regard.
This content is produced by Insights, the custom content arm of MIT Technology Review. It was not written by the editors of MIT Technology Review.