Technology is at the heart of the country’s sustainable development agenda. Kuala Lumpur, Malaysia’s business hub, has launched a smart city initiative that includes accelerating digital transformation by focusing on areas such as education, promotion of cloud technology and artificial intelligence (AI). The Malaysian government has also highlighted technology investments in its 2022 budget, with grants of up to 100 million ringgit ($23.7 million) for areas such as smart automation and at least 30 billion ringgit ($7 billion) for government-linked companies ) to invest in renewable energy, supply chain modernization and 5G infrastructure.
In recent years, Kuala Lumpur has also seen more and more “greening” opportunities. Urban governance, for example, employs an intelligent “city brain,” which uses Alibaba Cloud’s computing 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 South Korea-based Socar, which are eyeing green innovation and business opportunities, have also invested in and expanded their operations in Kuala Lumpur. Meanwhile, traditional industries, especially energy and electronics, have been trying to reinvent themselves.
Given this changing environment, this report examines what global companies in Greater Kuala Lumpur are doing to achieve their ESG goals, the opportunities the location has to offer, and how their local experiences can be applied globally.
The main findings of this report are:
Malaysia is committed to being a leader in regional decarbonization. The country’s current master plan depicts economic development through 2025, and includes a number of programs aimed at promoting sustainability by increasing renewable energy generation capacity, developing green transportation solutions, and building sustainable and resilient cities. This commitment to sustainability 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. However, while some countries’ reliance on fossil fuels and other traditional industries has affected their decarbonization commitments, Malaysia has leveraged its deep, globally integrated industrial clusters and supply chains to develop new, greener business processes and carbon Less intensive manufacturing and logistics processes.
Greater Kuala Lumpur witnesses growing opportunities for ‘greening’ For some of the country’s traditional innovation clusters, especially energy, electronics manufacturing, IT outsourcing and other areas of the digital economy. Asia’s fast-growing digital economy has also created unique synergies for digital “native” companies looking to use Kuala Lumpur as a hub where they can capitalize on green business opportunities in the region. These include South Korean green mobility company Socar, which is expanding its “people-to-people” carpooling model from its Kuala Lumpur base to Southeast Asia. There’s also Schlumberger, which has one of seven global “innovation factories” centers in Kuala Lumpur. The center is committed to accelerating the adoption of its artificial intelligence to drive energy transition efforts in East Asia.
Malaysia’s maturing sustainability stance is creating a culture of monitoring, measurement and ultimate accountability. This can serve as a framework for ESG-conscious companies to develop their own journeys. Far from being superficial, these efforts are critical to the market’s economic outlook. Sustainability-oriented global companies can both achieve their ESG goals through their Greater Kuala Lumpur operations and use their Malaysian experience as a template for sustainable innovation in their global operations. Malaysia’s role as a global hub for sustainable development is critical as its economy uniquely spans many industries, including high technology and energy production, which is critical in shifting the world’s development towards a low-carbon future. Collaboration and communication are critical to these efforts.
Download the full report.
This content is produced by Insights, the custom content arm of MIT Technology Review. It was not written by the editorial staff of MIT Technology Review.