ILO, Malaysian Employers Federation Advance ESG Training Ahead of 2026 Launch

Malaysia has witnessed a decisive policy shift in 2025, with ESG and human-rights standards increasingly becoming regulatory requirements rather than voluntary commitments.

The International Labour Organization (ILO) has strengthened its collaboration with the Malaysian Employers Federation (MEF) by supporting a two-day orientation session held on 14–15 November in Kuala Lumpur. The workshop introduced MEF’s national pool of trainers to the organization’s forthcoming Environmental, Social, and Governance (ESG) training package, a major capacity-building initiative developed in partnership with the University of Malaysia (UNIMAS). The full programme is scheduled for formal launch in early 2026, aligning with Malaysia’s rapidly evolving corporate responsibility landscape.

A Timely ESG Capacity-Building Initiative

Malaysia has witnessed a decisive policy shift in 2025, with ESG and human-rights standards increasingly becoming regulatory requirements rather than voluntary commitments. Demand from employers for practical, locally relevant ESG guidance has grown substantially, particularly as global supply chains impose stricter expectations on due diligence, traceability and labour rights compliance.

MEF’s new training package aims to bridge this gap by equipping Malaysian businesses—large companies and SMEs alike—with the tools needed to meet new reporting obligations, strengthen governance systems, and uphold responsible business practices. The programme will cover ESG fundamentals, risk mapping, human-rights due diligence, grievance mechanisms, ethical recruitment, and sustainability reporting.

A New Policy Landscape: 2025 as a Turning Point

Malaysia’s regulatory framework has undergone significant transformation over the past year. Three major reforms have shaped the direction of national ESG expectations:

1. Securities Commission Malaysia aligned corporate sustainability reporting requirements with the International Sustainability Standards Board (ISSB) standards—placing mandatory expectations on listed companies.

2. The i-ESG Framework, launched by the Ministry of Investment, Trade and Industry (MITI), offers a coordinated industry roadmap to strengthen environmental stewardship, labour practices and governance structures.

3. The National Action Plan on Business and Human Rights (NAPBHR) 2025–2030 was unveiled in August, setting out a comprehensive government commitment to responsible business conduct across supply chains.

Taken together, these shifts reflect Malaysia’s transition toward structured ESG compliance and are redefining corporate responsibility expectations across the economy. MEF’s training initiative responds directly to this new challenge.

Government Priorities and National Reform Efforts

Representatives from the Prime Minister’s Department (Legal Affairs Division – BHEUU) briefed participants on the implementation of the NAPBHR, highlighting priority issues such as:

• Workers’ rights and freedom of association

• Ethical recruitment and migrant-worker protection

• Preventing forced labour and excessive overtime

• Wage transparency and decent-work conditions

• Access to grievance mechanisms and remediation

To prepare the regulatory foundations for future legislation, BHEUU has also commissioned two critical feasibility studies:

• Mandatory human-rights due diligence (mHRDD)

• The potential establishment of a national human-rights tribunal

These studies signal Malaysia’s movement toward more robust legal obligations for businesses, similar to developments in the EU and other regions adopting due-diligence requirements.

Supporting Employers in a More Complex Policy Environment

With multiple ministries—including MITI, the Ministry of Human Resources, the Securities Commission, and the Prime Minister’s Department—now shaping the national ESG and human-rights agenda, Malaysian companies face increasing regulatory complexity. MEF’s central role in training, capacity-building and policy advocacy will be crucial in ensuring employers understand new expectations and can prepare for upcoming compliance obligations.

MEF Vice President Encik Edwin Yeap Khoo Soon emphasized the urgency of providing businesses with accessible guidance, noting that Malaysian companies—particularly SMEs—require clear, step-by-step frameworks to meet evolving ESG requirements while maintaining competitiveness.

The ILO’s support ensures that the training aligns with international labour standards, global supply-chain expectations, and the principles of responsible business conduct promoted by the UN Guiding Principles on Business and Human Rights (UNGPs).

A Strategic Step Toward 2026 and Beyond

The workshop marks an important milestone in Malaysia’s broader ESG transition. Once launched in 2026, MEF’s ESG training package is expected to become a key national resource for strengthening corporate sustainability, raising labour-rights standards, and supporting Malaysian enterprises as they navigate global market expectations.

The initiative also reinforces Malaysia’s commitment to sustainable development, aligning national practices with global norms while improving conditions for workers, suppliers and communities.