Green Innovation

Eco-innovation can create environmentally friendly industries to take advantage of the opportunities opened up by sustainable economies.
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Procurement provides another key business opportunity for the green economy.
By December 2015, 1,439 products had obtained green certification, and the target is to certify 5,000 green products by 2020.

The need to strike a balance between increasing demand for natural resources and environmental sustainability has opened new opportunities for Malaysia to grow economically. Under its eleventh economic plan 2016-2020, a green economy – one that aims to reduce ecological risks and address resource scarcities – has been identified as one of the main drivers for development. In line with this new approach, emphasis is given to innovation for creating more environmentally friendly industries to enable the growth to take place. Thus eco-innovation is to be nurtured, in the spirit of this green economy, to support attaining the 17 Sustainable Development Goals (SDG), especially those related to responsible consumption and production, and action on climate change.

My ministry has introduced various strategies related to the broad scope of eco-design, eco-materials development, cleaner production and eco-labelling so as to substantially promote sustainable development. These collective eco-innovation strategies facilitate industry players, including small and medium enterprises (SMEs), by empowering them to embed green technology into their production practices. “Energizing Industry” – the third strategic thrust of the National Policy on Science, Technology and Innovation (NPSTI) 2013-2020 – is identified as the prime enabler for companies to adopt innovative, green and environmentally friendly approaches. The NPSTI sets out a new and focused policy framework to discover, utilize and optimize the full potential of science, technology and innovation to achieve our long-term economic, social and environmental goals.
Standards and quality benchmarking are crucial to enhancing eco-innovation.

Several initiatives support these eco-innovation strategies. Programmes have been drawn up to address key challenges in propagating eco-innovation, or the adoption of Sustainable Consumption and Production (SCP) at the industry level. The major ones include (i) incentivizing SMEs, who make up about 98.5 per cent of the registered businesses in the country, by providing different forms of financial instruments to encourage uptake of green technologies as producers, suppliers or users; (ii) developing the necessary “soft” infrastructure, such as lifecycle analysis database and software programmes; (iii) capacity building; and (iv) continuous technological development that is market-driven or strategic to the nation’s long-term goals.

Standards and quality benchmarking are crucial to enhancing eco-innovation and appropriate, sufficient, quality adherence programmes are highly important in driving the green economy. Malaysia’s “SME Technology Penetration and Upgrading Programme” (STEP-UP), incorporating technology auditing, aims to intensify the use of innovation, creating healthy competition among SMEs and nurturing niche markets for them, which in turn helps increase productivity and marketability. This programme is steered by SIRIM Berhad, an agency under the Ministry of Science, Technology and Innovation (MOSTI). Since the programme's inception in mid-2015, more than 150 companies have undergone technical audits, with at least 30 of them also being subjected to additional eco-innovation elements.

Blending itself with global emerging trends, Malaysia has proactively undertaken a Type 1 “Eco-labelling Programme” and recently completed a pilot carbon footprint for it. The programme, which closely adheres to the ISO 14000 series, assists companies that have invested in improving the environmental performance of their products and services. Forty documents on product criteria have been developed and are used for eco-labelling certification of more than 60 products covering at least 300 brands.

A “MyHijau Programme” (Malaysia Green Programme) has been developed to ensure the availability of green products and services that conform to international standards and regulations. By December 2015, 1,439 products had obtained green certification, and the target is to certify 5,000 green products by 2020. In addition, a Voluntary Corporate-level Greenhouse Gas (GHG) Emissions Reporting Programme under the purview of the Ministry of Natural Resources and Environment was launched in 2013 to communicate our national environmental stewardship more widely and effectively: in 2015, a total of 50 Pilot Reporting Organizations participated in the programme, which serves as a globally-recognized platform for Corporate GHG reporting, while providing standards, guidance and support measures for the industry.

There is obviously a strong link between eco-innovation and green business. However – while eco-innovation helps drive green business in Malaysia – adopting green technology so rapidly has brought challenges, particularly in terms of financial capacity. The government has addressed this constraint by initiating the Green Technology Financing Scheme (GTFS) under the Ministry of Energy, Green Technology and Water. This unique funding support initially allocated 1.5 billion Malaysian ringgits ($384 million) but thus was increased to RM3.5 billion ($896 million) in 2012 to cater for the growing demand. Since its introduction, the scheme has drawn on the participation of 26 financial institutions and successfully supported 227 projects. As of February 2016, RM2.605 billion ($667 million) has been approved for producers and users of green technology, creating over 3,830 jobs and saving the equivalent of 2.907 million metric tonnes of carbon emissions.
Procurement provides another key business opportunity for the green economy, with the government using its purchasing power to promote the use of environmentally friendly products and services, while regulating the market's practices. As a start, the government initiated Green Procurement Projects in five selected agencies at an overall cost of RM265 million ($68 million) as of 2014. Under the Eleventh Malaysia Plan, Government Green Procurement will be made mandatory for all government ministries and agencies. This will create a demand for green products and services, encouraging industries to raise their production standards and quality via eco-innovation and other similar initiatives.

The significant role played by eco-innovation in supporting the SDGs is embedded in strategic programmes with different approaches. These programmes are driven equally by policies and market demand, with the ultimate aim of creating a “greener economy” for Malaysia, both in terms of wealth generation and environmental sustainability. MOSTI is the important mediator in this entire eco-innovation value chain, so as to ensure that synergistic alliances across the various ministries and agencies are successfully implemented. A real green Malaysia is perhaps still elusive, but with this current change in approach, a brighter future definitely blooms ahead.