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THE Penang Green Council has come out with a first in the country by collaborating with Alliance Bank to establish a RM100 million climate mitigation fund.
The funding is to enable small medium enterprises (SMEs) to transition and meet the mandatory environmental social governance (ESG) guidelines.
Alliance has set aside RM100 million for the first phase, but it has capped it, where each SME status company can only qualify for up to RM5 million in underwriting.
Council general manager Josephine Tan confirmed that it is the first of its kind funding for the private sector and the objective is to gear the macro and micro-level businesses to attain their ESG goals.
"We realise that it takes money to meet the ESG standards and we want to help the SMEs. The multinationals may have their resources, so we will devote our attention to the smaller scale," said Tan.
Tan said that with the funding, SMEs can embrace sustainable practices without looking at it as a punitive regulation.
"We are working out the mechanism on it and will inform the SMEs soon, but it is a fund designed for those operating in Penang solely."
Alliance's chief sustainability officer Roy Heong Beng Wai said that the funds would be dished out in stages to eligible candidates.
“First, we want to focus on manufacturing, electric and electronics, medicine and plastics. After that we will extend it to other industries. The initial fund total is RM100 million. We will first set aside RM20 million for the SMEs,” he said.
“We want the industries to demonstrate plans to incorporate sustainable practices. We will also provide capacity building, workshops, climate assessment and green technology. We need to be holistic.”
Heong said that the bank will also collaborate further by matching the type of green initiatives with its panel of green partners, who are vetted to ensure that they can deliver the skills and services required.
Heong said that Alliance is pivoting towards green funding initiatives after its survey revealed thaat a staggering number of SMEs are aware of the need to adopt ESG.
This means that they will need help, not just from the financing standpoint but from the technical side, and the bank will assist, said Heong.
The funding can also be used to help, for example plastic recyclers to produce bio degradable products, said Heong.
He cited an example of a SME which Alliance is helping; they can recycle discarded plastics into biodegradable - plastics with an outcome where there is no longer a need to produce fresh made plastics as the present cache can be recycled into environmental - friendly components. - November 2, 2025.
