Malaysia’s investment strategies will be focusing on the circular economy and renewable energy (RE), which is in line with the United Nations (UN) Sustainable Development Goals (SDGs).
Malaysian Investment Development Authority (Mida) deputy CEO Ahmad Khairuddin Abdul Rahim said leveraging on circular economy would facilitate Malaysia, which is one of the signatories of the Paris Agreement, in reducing greenhouse gas (GHG) by 45% by 2030.
“Malaysia is now targeting high-technology and high-quality investments and no longer accommodate investment related to labour-intensive projects.
“The prime minister has launched the MySDG Trust Fund during the Budget 2021 announcement with an initial allocation of RM20 million and on top of that, the sustainability sukuk via the issuance of US$800 million (RM3.32 billion) 10-year trust certificates and also issued US$500 million 30-year trust.
“This is a strong recognition for Malaysia in structuring both its Islamic finance and sustainability efforts, leveraging on SDG policies towards achieving shared prosperity vision,” he said at the Circular Economy Conference 2021 conducted virtually yesterday.
A circular economy is defined as an economic system that responds to global challenges such as climate crisis, biodiversity issues, poor waste management and pollution. The circular economy is the opposite of the linear economy, which utilises natural resources as the foundation of the business of making the end product, at the same time producing waste.
Ahmad Khairuddin said Mida has approved RM80.6 billion of investment in the first quarter of 2021 (1Q21), a 49% increase compared to 2020.
The investment involves 992 projects which are expected to provide 32,557 job opportunities for Malaysians, while 988 projects are in the pipeline to be approved with the potential investment of RM54.4 billion.
United Overseas Bank Ltd chief sustainability officer Eric Lim said business transitioning to a circular economy could generate about US$4.5 trillion in annual economic output by 2030.
“The existing circularity gap offers significant business opportunities for new and better growth. To prevent wastage, businesses have to rethink how products are designed, made and used to prevent waste. This can lead to innovation and cost-saving opportunities. The business opportunities arising from a circular economy are applicable across different industries.”
He said in the near term, industries such as plastics, fashion and food are more likely to be impacted or disrupted with the growing pressure from regulators and consumers.
Apart from RE, a circular economy has demonstrated a potential for a strong impact which is deemed an essential means to help address climate change and other global challenges, Lim said. He added that the model of a “linear” economy prevailing today is heavily extractive, resource and carbon-intensive.
“Today’s efforts to combat climate change have focused mainly on the critical role of RE and energy-efficiency measures. This is expected to tackle 55% of global carbon emissions.
“However, meeting climate targets will also require tackling the remaining 45% of emissions associated with the production of goods and the management of land.”
Lim added that the remaining portion of the emission consists of the harder-to-reduce emissions that arise from the production of buildings, vehicles, electronics, clothes, food, packaging and other goods and assets we use every day.
“A circular economy approach to products and materials entails keeping them in the economy as long as possible. This helps to reduce the energy demand and maintain the embodied energy that went into extracting the materials and making the products.”
Source The Malaysian Reserve