KUALA LUMPUR, 30 MAY 2024 – Ficus Capital (Ficus), the world’s first ESG-i venture capital firm, in collaboration with INCEIF University, announced today an innovative tool to empower MSMEs in Malaysia with sustainable practices. The launch of the ESG-i Assessment Framework was held at the Global Forum on Islamic Economics and Finance (GFIEF 2024), organised by Bank Negara Malaysia. This event is in collaboration with key industry players and under the patronage of the Ministry of Finance Malaysia. It was officiated by the Deputy Minister of Religious Affairs, YB Senator Dr Zulkifli Hasan.

​

A simple yet inclusive blueprint for assessing sustainability, the assessment framework incorporates Shari'ah principles and the Quadruple Bottom Line (QBL) concept—Planet, People, Profit, and Principle. It features refined questions and a scoring methodology to evaluate sustainability practices along with a transitional tool to help MSMEs embrace sustainable practices comprehensively.

​

YB Zulkifli Hasan said: “It is natural for Islamic finance development to converge with ESG as Islamic Social Finance has been practiced by Islamic Banks and Islamic Financial Institutions in Malaysia. This robust ESG-i framework by Ficus and INCEIF is timely as it comes on the back of our Prime Minister, Datuk Seri Anwar Ibrahim’s recent announcement on the government commitment towards Islamic finance innovation via partnerships. Furthermore, it will be catalyst towards greater integration between Islamic Finance and ESG.”

​

The ESG-i assessment framework was created in recognition of the vital role that MSMEs play in the global economy. In Malaysia, MSMEs represent 97.2 percent of business establishments, contributing significantly to Gross Domestic Product (GDP), employment, and exports. However, they often lack the resources to implement sustainable practices. By simplifying complex sustainability criteria, the ESG-i Assessment Framework provides practical tools for MSMEs to help them transition to a Low Carbon, Circular, and Resilient (LCCR) future. Through this, MSMEs can mitigate risks, unlock new markets, and enhance their financial performance. 

​

Ficus Capital Chairman, Nor Azamin Salleh, said: “The ESG-i Framework offers a practical solution to help MSMEs integrate sustainability into their operations, ensuring they remain competitive and resilient. This aligns with our commitment to supporting companies that operate according to ESG-i principles.” “When companies seek our assessment, they must undertake the ESG-i framework evaluation. Beyond financial metrics, we delve into environmental practices, social impact, and corporate governance. Our standards align with global expectations.”

​

As pioneers in ESG-i venture capital, Ficus developed this unique ESG-i assessment framework in-house and has been using it for several years. Recognising an industry need for this tool, Ficus ventured into a partnership with INCEIF University, a world-leading Islamic finance university with vast industry expertise, to develop this robust and practicable framework for MSMEs. The ESG-i Assessment Framework provides a user-friendly tool for MSMEs to understand and implement sustainability practices. It incorporates Shari'ah principles and QBL concepts, ensuring it is relevant to Halal MSMEs in Malaysia. The framework's objectives and approach are designed to support MSMEs in their sustainability journey, offering a structured pathway to integrate ESG factors into their operations.

 

Nor Azamin added: "The launch of the ESG-i Assessment Framework comes at a crucial time. As global sustainability standards evolve, it is imperative for Malaysian MSMEs to adopt practices that keep them competitive and resilient, while fulfilling Islamic finance principles.” With a global economic landscape increasingly influenced by climate change, technological disruption, and socio-economic inequalities, the ESG-i Assessment Framework helps Malaysian MSMEs better navigate these challenges by aligning with both local and international sustainability guidelines.

 

The Assessment Framework was piloted with a diverse group of MSMEs, demonstrating its real-world applicability and impact. Feedback from key stakeholders, including regulators, practitioners, Shari'ah scholars, and academicians, was crucial in refining the framework. The pilot phase highlighted the need for targeted support and the framework's potential to drive significant improvements in sustainability practices among MSMEs.

 

Professor Emeritus Dato' Dr Mohd Azmi Omar, President and CEO of INCEIF University said: The positive response from the pilot phase underscores the framework's practicality and impact. It provides MSMEs with the necessary tools to integrate sustainability into their business practices effectively. Additionally, it empowers them to be resilient, competitive, and future-ready." “The framework aims to be a catalyst for change, promoting a sustainable supply chain and addressing the evolving sustainability landscape”.

​

The ESG-i Assessment Framework features refined questions and a scoring methodology to better assess MSMEs' sustainability practices. It aligns with existing domestic and international sustainability guidelines, providing MSMEs with a transitional tool to embrace sustainable practices comprehensively.

​

It is a key tool for MSMEs to transition towards sustainable development within Malaysia’s dual financial system. The practical, simplified, and Shari'ah-compliant approach to sustainability enables MSMEs to navigate the complex global sustainability landscape and contribute to a sustainable future.