Firms Urged to Embrace ESG to Lower Energy Costs

By the Editorial Team · Friday, September 18, 2026

Malaysian companies, particularly SMEs, are increasingly adopting ESG practices to manage rising electricity costs following the introduction of the Automatic Fuel Adjustment (AFA) tariff system in July 2025. This shift is driving operational changes, such as altered machinery schedules and energy-saving measures, to balance cost control with environmental sustainability amid fluctuating electricity prices.

Companies in Malaysia are increasingly adopting environmental, social, and governance (ESG) practices as a strategic response to rising electricity costs, experts say. The shift comes after changes to the country’s electricity tariff structure, which now includes an Automatic Fuel Adjustment (AFA) mechanism that takes effect every six months.

Datuk Koong Lin Loong, treasurer-general of the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM), highlighted that small and medium-sized enterprises (SMEs) are particularly focused on reducing energy consumption to manage costs and environmental impact. The AFA, introduced in July 2025, replaced the previous Imbalance Cost Pass-Through (ICPT) system, causing businesses to reassess their energy usage patterns.

“With the move away from ICPT to AFA, companies will notice more fluctuations in their electricity bills,” Koong explained, noting the importance of energy-saving measures. He recommended practical steps such as turning off air-conditioning and lighting during lunch breaks and minimizing usage when offices are unoccupied. Koong also pointed to the proliferation of electronic devices in modern workplaces that continue to draw power even with reduced staff numbers, emphasizing the need for vigilant management of energy consumption.

“Applying ESG principles supports both environmental preservation and cost control,” he added.

Star Media Group Bhd (SMG) has also taken steps in response to the revised tariff structure introduced in July 2025. The company’s senior general manager for print operations, Goh Kok Soo, detailed changes under the new time-of-use tariff, where peak electricity hours now run from 2 p.m. to 10 p.m. on weekdays, with off-peak hours covering the remaining times and weekends.

Goh said SMG is focusing on reducing both total electricity consumption and maximum demand, closely monitoring the impact of the AFA on their costs. The firm has adjusted operating hours for machinery, including its wastewater treatment facilities, to better align with production needs and tariff periods.

“Previously, our wastewater treatment plant operated nonstop, 24/7. We have now optimized its schedule to run only during necessary periods,” Goh said. These operational changes aim to improve energy efficiency while managing electricity expenses under the new tariff framework.

The experiences of ACCCIM and SMG illustrate a broader trend among Malaysian businesses to integrate sustainability with financial prudence amid evolving energy policies. As electricity tariffs continue to fluctuate, companies are exploring how ESG practices can contribute to long-term cost savings and environmental responsibility.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.