By Dr Nivakan Sritharan
SARAWAK is at a crossroads where economic growth must align with environmental responsibility.
As global markets demand transparency and sustainability, businesses in the region face increasing pressure to measure and report their environmental, social, and governance (ESG) performance.
It’s rich biodiversity and resource-based industries make sustainability accounting even more critical for protecting ecosystems while ensuring competitiveness.
However, many companies struggle with fragmented data and rising compliance costs. Embracing sustainability accounting is no longer optional.
It is essential for attracting investment, meeting regulatory requirements, and securing long-term resilience in a rapidly decarbonising global economy.
Across Malaysia, regulations have tightened. Bursa Malaysia now requires listed companies to prepare ESG reports aligned with IFRS S1 and S2 standards, covering emissions, supply chain ethics, and biodiversity efforts.
Sarawak has reinforced this with its State Environmental (Greenhouse Gases Emission) Bill and Sustainability Blueprint. However, compliance alone does not guarantee impact.
Many businesses, especially SMEs, struggle with the expertise, resources, and tools needed to measure emissions or identify inefficiencies.
As of mid-2025, nearly three-quarters of Malaysian SMEs were still “ESG unready,” citing barriers such as high audit costs, fragmented data systems, and limited technical capacity.
Without timely, auditable data, ESG reports risk becoming mere paperwork exercises rather than drivers of real decarbonisation and resilience.
Perhaps, this is where artificial intelligence offers a transformative solution.
AI is not just a buzzword, but it is a practical tool that can shift sustainability accounting from a manual burden to a strategic advantage.
First, AI can automate data collection and improve quality. Sustainability data often comes from diverse sources, including utility bills, sensor logs, and supply chain records.
AI platforms can aggregate, validate, and standardise these inputs, ensuring that reports are accurate and audit ready. Second, AI reduces costs and speeds up reporting.
Bursa Malaysia’s partnership with Carbon GPT, for example, has cut ESG compliance costs by up to 70 per cent and reduced report preparation time from months to weeks.
For SMEs lacking in-house expertise, affordable AI-driven platforms like ESGAMConnect provide plug-and-play modules for energy, water, waste, and governance tracking.
Beyond compliance, AI delivers predictive insights that help businesses control emissions and optimise operations.
Machine learning models can identify inefficiencies, forecast energy spikes, and simulate risk scenarios, enabling proactive strategies rather than reactive fixes.
AI also supports regulatory alignment and benchmarking by integrating local and global standards, allowing companies to compare performance against peers and elevate ESG maturity.
For businesses in Sarawak, these capabilities translate into tangible benefits.
Cost savings are significant, as AI-enabled optimisation can reduce energy expenses by around 12 per cent.
When combined with government incentives for solar adoption, electric vehicles, and green technologies, the financial case becomes even stronger.
Market access is another driver; global buyers increasingly demand verifiable ESG credentials, and Sarawak’s palm oil and forestry suppliers risk exclusion without digital reporting solutions.
Funding opportunities also expand, as ESG-ready platforms unlock green bonds, sustainability-linked loans, and tax breaks tied to validated impact metrics.
Finally, AI-driven ESG reporting enhances resilience and reputation, aligning with Sarawak’s Sustainability Blueprint and signalling leadership to regulators and communities.
So how can businesses act?
Start small and scale fast. Businesses should pilot ESG automation using AI tools suited to their sector, such as Carbon GPT for compliance drafting or ESGAMConnect for integrated sustainability tracking.
Next, they can embed ESG into core business decisions. Use AI insights to uncover inefficiencies, model emissions reductions, and trace supply chain certifications like zero-deforestation.
Additionally, businesses can leverage government programmes such as Malaysia Digital’s Climate Action Pledge and Budget 2026 rebates and share costs through industry marketplaces or partnerships with R&D labs.
Finally, they can track and communicate their progress. AI dashboards can monitor year-on-year improvements in energy, water, and waste, while benchmarking reports and recognised certifications strengthen credibility with customers, banks, and regulators.
Sarawak stands at a pivotal moment.
Regulations are tightening, markets demand transparency, and AI tools now exist to lower barriers and empower businesses of all sizes.
Sustainability accounting has become both a compliance necessity and a competitive advantage.
By embracing AI-powered ESG platforms, companies in Sarawak can unlock cost savings, secure funding, and build trust.
From major corporations adopting advanced tracking systems to SMEs gaining access through affordable AI solutions, the ecosystem is maturing.
However, progress requires leadership, especially in Sarawak, where partnerships across government, academia, and industry can accelerate digital transformation, boost green investments, and secure a sustainable future for the state.
Businesses now have the tools, powered by AI, to move beyond compliance and deliver genuine environmental impact.
● Dr Nivakan Sritharan, School of Business, Faculty of Business, Design and Arts, Swinburne University of Technology Sarawak Campus
The views expressed here are those of the writer and do not necessarily represent the views of Sarawak Tribune. The writer can be reached at mvoon@swinburne.edu.my.
