ESG Demands Shifted the Directions of Automotive Industries

ESG demands are shaping sustainability strategies and dynamics of car markets in our country. Well, it can be both both bane and boon to the overall prospect of automotive industry based on the how they adapt to fulfil ESG standards.

The Malaysian used car market is facing challenges as concerns about the environmental and social impact of older gas-powered vehicles grow. These vehicles are seen as harmful to the environment, and could face increased costs and taxes, which could hurt businesses that sell them.

Embracing ESG practices—which focus on the environment, society, and good governance—can actually bring financial benefits. Companies that adopt these practices are often offered better loan rates and can improve their reputation.

Some car companies are adjusting to these changes by creating cleaner vehicles. Others are finding it difficult to incorporate ESG principles into their operations. However, the trend toward electric cars is gaining momentum due to reduced taxes and higher subsidies for these vehicles. This shift could greatly change the market landscape, pushing companies to reconsider their strategies.

While it is difficult to control emissions from used cars, businesses can still find innovative ways to make their operations more environmentally sustainable. Increased regulatory scrutiny emphasizes the need for companies to be transparent about their ESG efforts to maintain a positive image and retain the trust of investors.

Overall, adopting ESG practices is becoming a crucial part of business strategies in Malaysia, and is shaping the future of sustainable business practices in the automotive industry.