GREEN PRACTICES

GUIDELINE FOR
MANUFACTURING
SECTOR
GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 1
TABLE OF CONTENT
FOREWORD 5

LIST OF ABBREVIATIONS 6-7

LIST OF TERMINOLOGIES 8

CHAPTER 1 : INTRODUCTION 9

Highlights of the Manufacturing Industry 10

Industry and the Environment 11
Climate Change: Where Are We? 12
Sustainable Development Goals 13
Climate Action: Measures and Initiatives by the Malaysian Government 14
Impacts of ESG Towards the Industry 16
Why Manufacturers and Businesses Should Consider “Green Practices” 18
Example Success Story: Implementation of Green Practices in the Industry 19
Reality of Green Practices in the Industry 20
Existing National Policies and Guidelines 21
Purpose of the Green Practices Guideline for the Manufacturing Sector 23
Benefits of Green Practices Towards the Manufacturing Sector 24
Case Study: How Industry May Benefit From Implementing Green Practices 25

2 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

 CHAPTER 2 : OPERATIONAL DEFINITION AND 26
TERMINOLOGIES

DEFINITION OF GREEN PRACTICES 27

SCOPE AND APPLICATION 28

CHAPTER 3 : GREEN PRACTICES GUIDELINE 29

FOR MANUFACTURING SECTOR

Introduction 30
General Indicators 32
Materials 34
Waste and Emissions 39
Water 43
Energy 46
Innovation 51
Management 54
Framework of Strategic Approach 58
Indicators Alignment with Existing Policies, Benefits and Recognitions 60
Guideline Implementation 63
Stage 1: Preparation and Target Setting 64
Stage 2: Monitoring and Evaluation 65
Stage 3: Action Plan and Implementation Strategy 65
Towards Green Recognition and Certification 66
Challenges in Implementation of Green Practices Guideline 66
Creating an Enabling Environment 68
Way Forward 69

REFERENCES 70

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 3

CORPORATE INFORMATION
PROJECT TEAM (MGTC)
TS. Shamsul Bahar Mohd Nor
Kamaradzaman Mohd Bakri

‘‘
Abd Malik Atan
Azlina Hashim
Muhammad Faiz Abdul Rahman
Nur Amalina Hasanudin
Khairul Ikhwan Jamaludin

TECHNICAL EXPERT (UPM)

Dr Irina Harun (lead)
ACKNOWLEDGEMENTS
AP Dr Faradiella Mohd Kusin
The team wishes to express our appreciation to all
Dr Zakiah Ponrahono stakeholders who have provided feedback and comments
Dr Mohd Yusoff Ishak to the draft versions of this document.
PROJECT SUPPORT &
FACILITATION
Afiqah Aiman Abdul Gaffar Dato’ Jana Santhiran a/l Muniayan (KASA)
Pubeshwaran Yuvarajan Hidayu Hashim (EPU)
Nur Shazreena Mat Shukri Abd Aziz Chik (JAS)
Siti Afiqah Mohammad Sabri Mohd Nazri Ramli (JAS)
Syazwani Sahrir Yusni Md Yusop (MIDA)
Fatiah Abdul Aziz Hanis Ilyana Md Isa (MIDA)
Edison Choong Wan Sern (MATRADE)
Mohd Faizal Mohd Alwi (SIRIM Qas International)
Abd Rahim Wasik (SIRIM Qas International)
Ts. Raja Shazrin Shah (Galaxy Tech Solution (KL) Sdn
Bhd)

4 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR4

T
he development of green practice guidelines is a continuation of the implementation of the MyHIJAU Program under the Ministry
of Environment and Water (KASA) and the Malaysian Green Technology and Climate Change Corporation (MGTC) which is a
coordinating agency and secretariat for the program. This program has been approved by the National Council for Green Technology
and Climate Change (MTHPI) which was held on 23 October 2012. This is one of the Government’s initiatives in the development of Green
Technology in Malaysia. It is in line with the implementation of the National Green Technology Policy as well as the direction of Sustainable
Consumption & Production (SCP) to encourage local manufacturers, producers and suppliers, especially to companies and Small and
Medium Enterprises (SMEs). In addition, it will also focus on the Government’s initiatives and direction in the development of the country’s
SMEs.

The development of Green Practice Guidelines is to provide guidance to the green industry in implementing green practices at
the preliminary stage, during and after construction is implemented. These guidelines also have an implementation direction to ensure
that these Guidelines will continue to be referred to and used by all parties, especially industry players to help achieve the government’s
goal of implementing green development in Malaysia. This green practice can help the industrial sector to have the potential to venture
into the field of green technology, especially in the production of green products and services, as well as increase the encouragement of
producers, manufacturers and suppliers to apply green technology in the premises, production process and operation.
These Guidelines are more towards the requirements that need to be put into practice so that industries, companies and organizations
have green practice guidelines that can be referred to as well as help companies achieve the government’s goal of using green practices
in line with SDG 12.6, which is to encourage the industry to use sustainable practices and integrate information sustainability into the
reporting cycle.

Referring to the twelfth Malaysia plan under the eighth main focus which is to accelerate green growth, where this green practice
development program is able to play a very important role in being a catalyst to ensure that these green practices are more practical and
applicable to all parties in the green industry whether directly or indirectly for local companies and businesses to gain exposure to this
green industry practice guide.

Therefore, increasing productivity and long-term profits through environmental, social and governance (ESG) elements should be
applied in decision-making by ensuring that companies focus on reducing the negative impact on the environment. Although Malaysia
only contributes 0.7 percent to greenhouse gas emissions, the Government will continue to fulfil its commitment to reduce GHG emission
intensity up to 45 percent to GDP in 2030, based on emission intensity in 2005, in line with the aspiration to become a low carbon country.
It is hoped that this goal can be achieved by focusing on the industry to understand the importance of green practices in business by
applying knowledge about the benefits and applications of green technology as well as the implementation strategy of the green practice
monitoring mechanism in business management to obtain the recognition of the green industry.

FOREWORD
GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 5
LIST OF ABBREVIATIONS

3R Reduce, Reuse, and Recycle

CCS Carbon Capture and Storage
CH4 Methane
CO2 Carbon Dioxide
COP26 The 2021 United Nations Climate Change Conference
CSR Corporate Social Responsibility
EEV Energy Efficient Vehicles
EFB Empty Fruit Bunches
EMGS Energy Management Gold Standard
EPF Employees Provident Fund
EPR Extended Product Responsibility
EQA1974 Environmental Quality Act 1974
ESG Environment, Social, and Governance
EToU Enhanced Time of Use
EU European Union
EVs Electric Vehicles
FGV Felda Global Ventures
GBI Green Building Index
GDP Gross Domestic Product
GERD Gross Domestic Expenditure on Research and Development
GHGs Greenhouse Gases
GJ Giga Joule
GLIC Government-Linked Investment Companies
GMP Good Manufacturing Practice
GTMP Green Technology Master Plan
HFCs Hydrofluorocarbons
HHI Herfindhal-Hirschman Index
HR Human Resources
ICE Internal Combustion Engine
IPP Independent Power Producers
ISO International Standard Organization
MDGs Millennium Development Goals
MEPS Minimum Energy Performance Standard
MITI Ministry of International Trade and Industry
MSIC Malaysia Standard Industrial Classification
MT Metric Tonne

6 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

LIST OF ABBREVIATIONS

MW Megawatt
MWh Megawatt-hour
MyCREST Malaysian Carbon Reduction & Environmental Sustainability Tools
MyOrganic Malaysia Organic
MySDG Fund Malaysia Sustainable Development Goals Trust Fund
N2O Nitrous Oxide
NEA National Energy Awards
NEEAP National Energy Efficiency Action Plan
NF3 Nitrogen Trifluoride
NGV Natural Gas Vehicles
NGO Non-Governmental Organizations
NRPAs National Research and Development Priority Areas
NRW Non-Revenue Water
OHSAS Occupational Health and Safety Assessment Series
PASS Green Performance Assessment System
PFCs Perfluorocarbons
POME Palm Oil Mill Effluent
PRF Permanent Reserve Forest
PV Photovoltaics
R&D Research and Development
RE Renewable Energy
SDGs Sustainable Development Goals
SF6 Sulfur Hexafluoride
SME Small and Medium Enterprises
SO2 Sulfur Dioxide
SOP Standard Operating Practice
SPAN Suruhanjaya Perkhidmatan Air Negara
UNFCCC United Nations Framework Convention on Climate Change
UNIDO United Nations Industrial Development Organization
WEPLS Water Efficient Product Labelling Scheme

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 7

LIST OF TERMINOLOGIES
These are the terminologies used within this Guideline:

The implementation of a tax or fee, or a cap-and-trade system on the carbon content of fossil fuels or on their carbon dioxide
Carbon pricing emissions. It is a tool mechanism that harnesses market forces to lower their emissions by switching to more efficient processes or
cleaner fuels.
A fee imposed on companies and organizations that emit carbon from the burning of coal, oil or gas. The main goal of carbon tax is
Carbon tax
to reduce the emission of greenhouse gases to the atmosphere.
An economic system that ensures the maximum use is extracted from resources and minimum waste is generated for disposal. It is
Circular economy a model of production and consumption that keeps materials, products and services in circulation for as long as possible by reusing
products rather than disposal at end-of-life and then extracting new resources.

Cleaner production The process of effectively using resources and energies, thus minimizing the waste generated from the process.

A concept that consider and actively minimize the environmental impact of a product across its entire lifecycle, from material
Eco-design extraction and supply to end of life. It may also be known as the ISO/TR 14062 standard for environmental management in product
design.

Efficient Achieving maximum productivity with minimum wasted effort or expense.

Waste includes any matter prescribed to be scheduled wastes, or any matter whether in a solid, semi-solid or liquid form, or in the
Waste form of gas or vapor which is emitted, discharged or deposited in the environment in such volume, composition or manner as to
cause pollution.

Any activity or concept that seeks to increase the degree by which the processes of the manufacturing industry meet environmental
Green
standards and deepen their integration within a circular economy.

Reflects a new manufacturing paradigm which implements various green strategies and techniques (technology and innovation)
to become more efficient. It includes generating processes with low environmental impacts, and processes that are productive
Green manufacturing
with reduced waste and contamination. It is a multi-measure strategy to reduce an environment-polluting waste created during
manufacturing activity.
Industry Activities which are described in Section C (Manufacturing) of Malaysia Standard Industrial Classification 2008.
Any person or company that assemble or make a product, enclose or pack that product in any container in a form suitable for
Manufacturer administration or application, labelling of the container and the carrying out of any process in the course of any of the foregoing
activities.

A ranking system used for the different waste management options according to which is the best for the environment. The most
Waste hierarchy
preferred option is waste prevention, followed by reuse, recycle, recover and the least preferred is disposal.

8 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

CHAPTER 1 :
INTRODUCTION
GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 9
HIGHLIGHTS OF THE MANUFACTURING INDUSTRY

The manufacturing sector plays a significant role in the

nation’s economic growth, creating job opportunities,
producing more affordable goods in larger capacities,
and improving livelihoods.

According to data from the Department of Statistics

Malaysia, the manufacturing sector contributes 23.6%
of Malaysia’s GDP in 2020 (Dept. of Statistic Malaysia,
2021).

As of June 2021, manufacturing sales amounted to

RM124.4 billion, an increase of 6.5 per cent.

The manufacturing sector employs 2,215,420

employees amounting to RM7360.3 million of total
salaries and wages (Dept. of Statistic Malaysia, 2021).

In 2020, the manufacturing sector along with the

services and primary sectors attracted a total of RM164
billion worth of approved investments, 39.1% of which
came from foreign investments.

This is expected to create 114,673 new jobs across

4,599 projects (Malaysian Investment Development
Authority, 2020).

10 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

INDUSTRY AND THE ENVIRONMENT

While development brings prosperity to the people and the country, the economic, technological, and social advances have also altered
the way people interact with their environment significantly.

Increasing
The manufacturing industry
has traditionally transformed How about the population

primary outputs from multiple environmental

sources into new and
innovative products impact? High
Demand for
materials and
standard of
products
living

Technology

As the standard of living Naturally, this also increases the

increases and population amount of waste and emissions
that must be discharged into
thrives, the demand for more
the environment, along with the
materials and products have subsequent depletion of natural
also increased. resources. NATURAL
RESOURCES
Raw meterials, minerals,
water, energy,land resources

To cope with the times and

market demands, the industry More natural resources such as
has evolved into highly complex metals, minerals, fossil fuels and WASTE AND
structures which converts water had to be utilized at higher EMISSIONS
various primary and intermediate energy intensities to produce the Solid waste, effluents,

goods into final products. required volume of products greenhouse gases,

carbon emission

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 11

CLIMATE CHANGE: WHERE ARE WE?
Climate change is one of the most daunting challenges of the 21st century. At its core is the fact that economic development should not
compromise the environment, and the greenhouse gases (GHGs) emissions must be controlled to alleviate and slow down the impacts of
climate change for the benefit of current and future generations.

Malaysia currently contributes 0.7% to global GHGs emissions (12th Malaysia Plan). Among the major sources of emissions, the
manufacturing and construction industries were the third largest contributor (Malaysia BUR3 UNFCCC Report, 2020).

39% 21% 9% 7% 7% 4%
Energy industries: Transport: Road Manufacturing industries Land converted to Energy industries: Energy industries:
Electricity and heat transportation and construction settlements Natural gas Petroleum refining
production transformation

3% 5% 2% 2% 1%
Cement Production Others Transport : Domestic Other process uses of Petrochemicals &carbon
water borne navigation carbonates black

Malaysia aspires to be a low-carbon nation by 2050 through an unconditional commitment to reduce GHG emissions (against Gross
Domestic Product: GDP) of 45% by 2030 compared to 2005 level.

Initiatives such as the Green Techonology Master Plan, Green Technology Financing
This aspiration is in line with the commitment of the Malaysian Scheme, Low Carbon Cities Framework and Government Green Procurement
government towards climate action and green technology.
New economic instruments such as carbon
pricing and carbon tax will be introduced and imposed as part of strategies to achieve low-
This also presents an opportunity for manufacturers and carbon development
businesses through: National Energy Policy to be launched with Acts related to energy efficiency and
• New economic instruments to support the industry in conservation to supervise energy consumption by high-intensity users in the industrial and
commercial sectors
decarbonization of their operations
Circular economic model will be implemented under the 12th Malaysia Plan to reduce
• Strengthen their ESG portfolio and sustainability reporting pollution, waste generation and dependence on natural resources

12 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

SUSTAINABLE DEVELOPMENT GOALS

17 GOALS TO TRANSFORM OUR WORLD

What is Sustainable Development Goals?

The UN SDGs was adopted by the United Nations in 2015 as a universal call to action to end poverty, protect the planet and ensure that
by 2030 all people may enjoy peace and prosperity.

It is a continuation of the eight Millennium Development Goals (MDGs) which began in 2000 which had successfully lift nearly one billion
people out of extreme poverty, combat hunger, eliminating global consumption of ozone-depleting substances, planting trees to offset the
lost of forests and many other initiatives

The three pillars of sustainability, social, economic and environment elements are present in the SDGs, which were also made more
actionable by introducing specific targets for each goal, along with indicators that are being used to measure progress of each target,
some meant to be achieved between 2020 and 2030.

Manufacturers and businesses that adopt green practices are supporting the SDGs, particularly SDG 12.6 which is to encourage
companies to adopt sustainable practices and to integrate sustainability information into their reporting cycle.

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 13

CLIMATE ACTION: MEASURES AND INITIATIVES BY THE MALAYSIAN
GOVERNMENT

The issues of climate change and the environment are vital to the survival of our nation. The Government of Malaysia, through its various
ministries, departments and agencies, has taken various measures and initiatives to address these issues, efforts of which can be
categorized into three major themes; energy, waste and forestry.

RENEWABLE ENERGY (RE) NATIONAL ENERGY

Fit-in-Tariff Hydropower EFFICIENCY ACTION PLAN (NEEAP)
Mechanism under the Hydropower is This plan was introduced targeting the residential commercial
Renewable Energy poised to play an and industrial sectors. Key initiatives under NEEAP:
Policy & Action Plan to increasingly • 5 star rated appliances • Energy audits and energy
catalyse generation of important role in meeting • Minimum Energy management in buildings
Renewable Energy (RE) Malaysia’s energy and Performance Standard and industries
up to 30 MW in size. climate goals. (MEPS) • Energy efficiant

ENERGY Emission avoidance: Emission avoidance:

• Co-generation •
Emission avoidance:
building Design

460.52 Gg CO2 eq 6,535.99 Gg CO2 eq 458.02 Gg CO2 eq

ENERGY EFFICIENT VEHICLES (EEVs) GREEN BUILDING RATING SCHEME URBAN RAILED-PUBLIC
Malaysia aims to become a regional hub for energy Focus on promoting natural-gas vehicles in the public
TRANSPORT
efficient vehicles (EEVs) through strategic invectments transport sector, in particular for taxis and buses.
and adoption of high technology. The EEVs include Existing standard:
Green certification: The implementation of public trasport initiatives is
• Malaysia Carbon important to reduce the use of private vehicles on
fuel-efficient internal combustion engines (ICE) Reduction & Environmental
vehicles, electric vehicles, hybrid & alternative-fueled Sustainability Tools • Green Building Index the road.
vehicles. (MyCREST) (GBI) Existing plan:
Related policy: • Green Performance • GreenRE
Assessment System
• National Land Public Transport Master Plan
The National Automotive Policy 2014 (PASS) • The Tenth and Eleventh Malaysia Plan
Emission avoidance: Emission avoidance: Emission avoidance:
90.65 Gg CO2 eq 143.47 Gg CO2 eq 212.93 Gg CO2 eq

NATURAL GAS VEHICLES BIODIESEL OIL & GAS OPERATIONS

(NGVs) Biodiesel has received great attention as PETRONAS, as the national oil and gas company of Malaysia
Focus on promoting natural-gas vehicles in the an alternative fuel, considering its abundant is committed towards a lower carbon footprint.
public transport sector, in particular for taxis and resources and environmental benefit. Related
Emission reduction in oil & gas operations can be achieved
buses. Benefits of program: policies and Acts: through:
• The National • Industry Act
• Lower retail prices • Road tax reduction • Zero continuous flaring and venting in all operations for
Biofuel Policy fugutive emissions
• Incentives • Import duty and
• Malaysian Biofuel • Continuous improvement and plant efficiancy in natural
sale tax exemption gas transformation
Emission avoidance: Emission avoidance: • Enhance improvement in plant efficianct of oil refining
114.77 Gg CO2 eq 1,127.34 Gg CO2 eq industries

14 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

CLIMATE ACTION: MEASURES AND INITIATIVES BY THE MALAYSIAN
GOVERNMENT
WASTE PAPER RECYCLING BIOGAS RECOVERY FROM PALM
Target 40% waste redirection from waste
OIL MILL EFFLUENT (POME)
• Biogas plays a crucial role in driving Malaysia that is moving
disposal sites:22% through recycling towards adopting renewable energy and environmental
sustainability.Target inclue equipping mills with biogas entrapment
• 18% through waste treatment facilities to generate electricity for supply to the grid or for self-
cinsumption.
Impact:Increase of Related Policy: Impact:As of 2017, out of Related Project:
• National Solid Waste 454 palm oil mills, 104 of Entry Point Project - Developing
recycling rate materials Biogas Facilities Palm Oil Mills
Management Policy them were fully equipped
from 17% in 2015 to 2006
Related Program:
with biogas capture Economic Transformation
21% in 2017. • Eleventh Malaysia Plan facilities. Programme 2010

WASTE Emission avoidance:

3937.76 Gg CO2 eq
Emission avoidance:
2377.84 Gg CO2 eq

AGRICULTURE SUSTAINABLE MANAGEMENT OF

FOREST
Malaysian Organix Scheme (SOM) or Malaysia Forest certification scheme that allow the annual
Organic (MyOrganic) is a certification that allowable cut in Permanent Reserved Forest (PRF)
recognizes farm that practice good agricultural is capped at 85 m3/ha for the period of tenth &
practices and organix fartming based on Malaysian elevent Malaysia Plan.
Standard MS 1529:2015 Related Certification:
Malaysia Criteria and Indicators for Forest
Management Certification 2001
Impact:
253 farms have been certified with MyOrganic Emission avoidance:
FORESTRY certification with an area of 2,045.60 ha as for now 20,307.50 Gg CO2 eq

CONSERVATION OF BIODIVERSITY FOREST ENRICHMENT PROGRAMMES

AND ECOSYSTEM SERVICES • Aims:
• Improve degraded forests sequestration capacity
Relevant initiative : • Enhance connectivity between forests through two
Malaysia Protected Area (PA) Network distinct initiatives
Target: • Examples:
Increase Protected Area to at least 20% by 2025. • Central Forest Spine (CPS) Programme in
Impact: Peninsular Malaysia
Protected Area increased from 2.757 to 3.171 • Heart of Borneo (HoB) Programme in Sabah and
million ha between 2014 and 2016 Sarawak

The carbon emission avoidance has been one of the central elements that link these efforts, and as manufacturers who are facing an
increasingly carbon-conscious world, implementing green practices in current processes and operations are the next logical step in
ensuring the survival and performance of the company.
GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 15
IMPACTS OF ESG TOWARDS THE INDUSTRY

The manufacturing industry must address the interrelated challenges of avoiding pollution, improving resource efficiency, achieving major
reductions in the emission of greenhouse gases (GHGs), and altering industrial structures to mitigate negative impacts towards the
environment.

This is also supported by the emerging trend among trading partners, capital markets and financial institutions, where compliance with
the principles of ESG (environment, social, and governance) has become increasingly imposed and must be seriously considered by the
industry to ensure long-term survival of the manufacturing sector.

“ESG presents an intriguing opportunity to

WHAT IS ESG?
businesses and manufacturers”

ESG refers to Environmental, Social and Governance criteria that measures the ethical and sustainability impacts of an investment in
a company or business.
The Ministry of Finance had outlined some strategies to empower and enable SMEs towards ESG including:
1. Principles for Good Governance to be implemented by the Government-Linked Investment Companies (GLICs)
2. Through Budget 2022, specific financing measures were introduced including Bank Negara’s RM1 billion Low Carbon Transition
Facility, RM100 million matching grant for NGOs and social enterprises, and RM80 million allocation to Kasih Suri under EPF and
SOCSO
3. Establishment of the Malaysia Sustainable Development Goals Trust Fund (MySDG Fund)

16 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

IMPACTS OF ESG TOWARDS THE INDUSTRY

At COP26, USD100 billion annually is pledged by developed

Within and beyond Malaysia, significant number of investors are
countries to developing countries to support climate efforts
placing more emphasis on the implementation of ESG framework
that meets the goals of the Paris Agreement and the United
within a company. Concerns about energy efficiency, waste
Nations Framework Convention on Climate Change
management, greenhouse gas emissions, water consumption
(UNFCCC) up to 2025. This climate finance includes local,
or biodegradable material are now central to global finance which
national, and transnational financing that support mitigation and
are covered by the three focal factors of ESG that measures the
adaptation actions which aligns with existing ESG frameworks
sustainability and ethical impact of an investment.
that businesses can adopt and practice.

Businesses that chose not to address ESG components may face risks in their business operations, financing costs and fluctuating
share price performance.

To address the issues of environmental protection, climate change and sustainable development, manufacturers should consider the
adoption of green technology in their operations and management.

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 17

WHY MANUFACTURERS AND BUSINESSES SHOULD CONSIDER
“GREEN PRACTICES”
“Green Practices” can be defined as the practice of creating structures and using processes that are environmentally responsible and
resource-efficient throughout the lifecycle of a development.

The implementation of Green Practices in existing operations and processes has direct and indirect benefits to the industries and
manufacturers. Other than environmental protection, the adoption of green practices increases long-term productivity and profit. Some
of the ESG elements may also be achieved through these improvements, ensuring long-term survival of the company and cementing its
good reputation

Reputation and
branding, as
well as aligns
with ESG
Operational and/or management compliance
practices that aligns with SDGs Green consumerism and
to protect human lives and the practices
environment Maintain
global
Sustainable competitive
Development Attract
edge green
Goals (SDGs)
investors Green technology helps
Utilization of natural maintain and restore the
resources for the production environment
of more affordable goods Increase
productivity and
Enviromental
profit
protection

Reduce waste and increase

WHY GREEN industrial symbiosis where
Low carbon
New and innovative
technology TECHNOLOGY? Cicular one industry’s waste becomes
technologies that lowers economy another’s resource
carbon emission

18 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

EXAMPLE SUCCESS STORY: IMPLEMENTATION OF GREEN PRACTICES IN THE
INDUSTRY
There are many ways of implementing green technology within the operations, resources, or processes of an industry. The decision
to go ‘green’ may come from requirement to reduce carbon footprint, utilization of green resources, compliance with regulations, or
contribution to society and the environment, but it is a decision that may well lead to increased revenues, global recognition, improved
performance of operations and higher productivity.

FGV Holdings is a major palm plantation company that owns 28 biogas power plants and had developed a commercial-scale palm-
based natural gas plant in Malaysia. It supports the Malaysian sustainable agenda through initiatives in green energy and resources.

FGV PALM INDUSTRIES SDN BHD

Core business
Manufacturer of vegetable oils, cake and meal

Achievement
Won the National Energy Award (NEA) three years consecutively (2018-2020) the
Renewable (Cogeneration) Category

Approach
Utilizing waste-to-energy technologies from the palm waste. Empty fruit bunches (EFB)
were used to produce steam and electricity at FGVPI’s Sahabat Biomass Cogeneration
Plant in Lahad Datu, Sabah.

Added Value
The complex generated 7.2 megawatts (MW) of electricity, equivalent to powering up 4,000
houses. The rural mini grid was supported throught this initiative, enabling more than 1,500
homes to enjoy clean renewable electricity with lower cost of energy generation Around 16
metric tonnes (MT) of steam per hour was also generated for the refinery operations.

Revenue
This activity generated approximately RM12 million per year for the company.
1 2 3
Benefits
28816 MWh 177035 MT CO2 76829 GJ energy
Increased revenue, energy savings and reduced carbon footprint energy generated saved in 2018 and sold from biogas
in 2018 and 2019 2019 and IPP Sahabat

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 19

REALITY OF GREEN PRACTICES IN THE INDUSTRY

The manufacturing industry is uniquely positioned to improve livelihoods and at the same time contribute towards the global sustainability
agenda. After all, the environmental aspects and impacts of products, activities and services have always been the driving factors of the
advances in the manufacturing sector.

New paradigms involving cleaner production, lean manufacturing and circular economy can be found within the precepts of green
manufacturing. Hence, embedding green practices in the manufacturing sector is a strategic move towards maintaining the economic
and environmental viability of the industry.

The move to adapt green practices in existing processes and operation of the manufacturing industry is also aligned to many government
policies, guidelines and regulations that are related to climate action, decarbonization of the industry and green technology.

20 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

EXISTING NATIONAL POLICIES, GUIDELINES AND STANDARDS

National Policy on the Environment (Dasar Alam Sekitar Negara)

1 Aims for continuous economic, social, and cultural progress and enhancement of the quality of life of
Malaysians, through environmentally sound and sustainable development.

Environmental Quality Act 1974

2 Related to the prevention, abatement, control of pollution and enhancement of the environment quality.

Environmental Quality Environmental Quality Environmental Quality

(Prescribed Premises) (Prescribed Premises) (Prescribed Premises)
(Crude Palm Oil) Regulations 1977 (Raw Natural Rubber) Regulations 1978 (Scheduled Waste Treatment and
Disposal Facilities) Order 1989

Environmental Quality (Control Environmental Quality (Control Environmental Quality (Scheduled

of Emission from Diesel Engines) of Emission from Petrol Engines) Waste) Regulations 2005
Regulations 1996 Regulations 1996

Environmental Quality (Industrial Environmental Quality Environmental Quality (Clean Air)

Effluent) Regulations 2009 (Sewage) Regulations 2009 Regulations 2014

Water Services Industry Act 2006 (Act 655)

3 Aims at establishing a licensing and regulatory framework for regulatory intervention to promote the
national policy objectives for the water supply services and sewerage services.

Good Manufacturing Practice (GMP)

4 A prerequisite for the application of a specific manufacturing license as well as product registration or
cosmetic notification.

Must be followed by manufacturers of registered pharmaceutical

Available for medicinal products, traditional medicines and health
and traditional products, as well as cosmetics to ensure that the
supplements, cosmetics, food, and veterinary premises.
products manufactured are safe, efficacious and of quality.
GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 21
EXISTING NATIONAL POLICIES, GUIDELINES AND STANDARDS

The International Standard Organization (ISO)t

5 ISO develops 19,500 international standards applicable across various industries. The common ISO
Standards which are relevant for manufacturers includes:
• ISO 14001: Environmental Management System
• ISO 45001: Occupational Safety and Health
• ISO 50001: Energy Management System

ISO 14001 helps organizations minimize the environment ISO 45001 designed to replace OHSAS 18001 and ISO 50001 outlines the practices to achieve
impacts of their operations. It specifies requirements improve levels of workplace safety and productivity. energy efficiency to meet environmental and
for establishing an environmental policy, determining OHSAS 18001 focuses on controlling hazards and carbon targets as part of improved energy
environmental aspects and impacts of products, activities take a reactive approach, but ISO 45001 proactively performance. It also helps to measure and
and services, planning environmental objectives and evaluate and remedy hazards before any accidents monitor energy use, identifying strategies
measurable targets, implementation and operation of or injuries occur. to improve energy efficiency and allowing
programs to meet objectives and targets, checking and manufacturers to demonstrate environmental
corrective action. credentials.

Malaysian Standard: MS1525:2019

6 Standard developed by the Department of Standards, Malaysia and is a code of practice pertaining to
energy efficiency and the use of renewable energy in non-residential buildings.

The code distinguishes between passive measures and active Passive measures consist of recommendations relating to
measures that can be adopted by building owners. architectural and passive design strategies for the building sector.

Active measures correspond to lighting, power and distribution, air Helps reduce overall energy consumption and minimize the use
conditioning and mechanical ventilation and energy management of non-RE sources, maintaining a safe, healthy and comfortable
systems. environment for building occupants.

22 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

PURPOSE OF THE GREEN PRACTICES GUIDELINE FOR THE MANUFACTURING
SECTOR
The development of the Green Practices Guideline was approved by the Ministry of Environment and Water in 2021 through the Twelfth
Malaysia Plan (RMKe-12) under SDG 12.6 which is to encourage companies to adopt sustainable practices and to integrate sustainability
information into their reporting cycle.

This government initiative supports the country’s development of green technology policies towards the direction of sustainable development
for industries and organizations in Malaysia.

The initial implementation of this Guideline focuses on fostering exposure, perception, knowledge and capacity building of green
resources, processes and technologies (culminating into the term known as green practices) of the industry.

MANDATE GREEN POLICY

Ministry of Environment Support green technology policies towards

and Water approval through the Twelfth sustainable development for industries and
Malaysia Plan (RMKe-12) in 2021. organizations in Malaysia

PURPOSE APPROACH

Provide guide and recommendations to the Optimize consumption of natural resources,

manufacturing industries in implementing energy, and water while reducing toxic waste
green practices. and emissions.

It is envisioned that the application of green practices in the industry will lead to cleaner, more efficient and more environmentally
friendly operations, processes, and premises of the Malaysian industry.

Consumption Reduce the Utilizing

OPTIMIZE
of natural 2 Increase
circularity of
REDUCE
emission 4 innovative
1 resources materials, 3 of toxic or green
including raw energy and hazardous technologies
materials, CIRCULARITY water through waste IMPLEMENT to improve
water, energy reduce, reuse processes and
and land use and recycle operations
approaches

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 23

BENEFITS OF GREEN PRACTICES TOWARDS THE MANUFACTURING SECTOR
The major benefits of applying the options suggested by this guideline include increased efficiency and reduced consumption of materials,
energy, and water. In essence it will produce less waste with a lower intensity of toxic or hazardous materials, as well as supporting green
innovations of the technology. It should also lead to better human resource utilization for the industry.

Green practices may also increase industrial productivity and revenue, while inculcating a green working culture that is beneficial not only
to the economy but also to the environment.

FINANCIAL RESOURCES HUMAN RESOURCES TIME RESOURCES

May require high capital investment Specific expertise may be needed

New ‘green’ jobs Additional time may be required to

Longer rate of return may have to be expected
CHALLENGES implement options that involves equipment,
New SOP may have to be implemented at structure or systems modification
May increase cost of operation
various stages of the production process

Competency of staffs
Labor cost
Payback period Maximum downtime
EVALUATION Trainings
Return on investment Green technology
experts

Yet, implementing green options, companies can expect:

Increased productivity and quality of
Overall cost reduction through energy and
process and products Reduction of environmental impacts
materials saving
BENEFITS

Reduced health and occupational safety risks Reputation and branding Enhance confidence of staffs

Through green practices in general, and based on the specific indicators outlined in this Guideline, manufacturers may review, manage
and plan for more sustainable business decisions that supports their ESG aspirations and sustainability reporting.

Furthermore, the global trend of green consumerism, carbon trading and carbon tax necessitates a closer look into greener and sustainable
practices of the industry, as these initiatives are also in the initiation stage in Malaysia.
24 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR
CASE STUDY: HOW INDUSTRY MAY BENEFIT FROM IMPLEMENTING GREEN
PRACTICES
Direct benefits to manufacturers include cost saving that comes from reduced overall utilities consumption including electricity and water.
These are some of the general examples:

1 Electricity saving through optimization of consumption

• Electric motors are widely used in the industry. Using variable frequency drive (VFD) or variable
speed drive (VSD), the current flow can be controlled which optimizes energy consumption.
Theoretically, up to 10-15% electricity can be saved from the use of the VFD or VSD.
Estimate:

Cost of operating a non-VSD motor = RM7,200/month

Price of new machine = RM30,000

With an average of 12.5% electricity saving,

Cost saved = RM10,800/year

Return of investment = 2.8 year

2 Water saving through recycle, reuse and reduce strategies 3 Electricity saving by utilizing daylight

• Assuming one of the largest commercial premise consumption • Assuming the electricity consumption of Company A is 138,244
of water is around 500,000 m3/month, with just 15% reduction kWh/month, corresponding to electricity bill of RM80,604.20/
through strategies such as reduce, reuse and recycling of used month.
water,

Estimate: Estimate:

Average water bill = RM958,716/month Setting up of transparent roof panels to utilize natural
light in building, around 30% electricity saving is
With an average of 15% reduction, targeted which amounts to,

Consumption reduction = 425,000 m3/month Consumption reduction = 41,473.2 kWh/month

Cost saved = RM191,743/month Cost saved = RM24,222.83/month

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 25

OPERATIONAL DEFINITION
OF GREEN PRACTICES
26 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR
DEFINITION OF GREEN PRACTICES

By definition, green practices refers to the industrial development and production conducted without jeopardizing the environment or
public health.

This concept is embodied by the definitions of “green industry”, “greening of industry” and also “cleaner production” which were defined
by the United Nations Industrial Development Organization (UNIDO).

Green Industrial production and development does not come at the expense of the health of natural systems or
Industry lead to adverse human health outcomes

Greening of Industry A method to attain sustainable economic growth and promote sustainable economies. It includes
policymaking, improved industrial production processes and resource-efficient productivity

Cleaner The continuous application of preventive environmental strategies to processes, products and services,
Production to increase efficiency and reduce risks to humans and the environment. It addresses:
1. Production Efficiency: optimization of the productive use of natural resources (materials, energy and
water);
2. Environmental management: minimization of impacts on environment and nature through reduction
of wastes and emissions; and
3. Human Development: minimization of risks to people and communities and support for their
development.

Manufacturers that adopt green practices integrate approaches that consider the environment, climate, social and economy within its
operations.

GREENIFYING
INDUSTRIES THROUGH

Efficient use Expanding sustainable Establishing green industries

of resources energy systems & phasing that deliver environmental
out toxic substances goods & services

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 27

SCOPE AND APPLICATION

The Green Practices Guideline for the Manufacturing Sector encompasses the following scope:

Include general guidance

1
The manufacturing sector

2 3
A general guide for includes, but are not limited to, on identifying key action
all existing and new 13 industries within the scope plans and implementation
manufacturers; of the MinXistry of International strategies for green
Trade and Industry (MITI); practices.

The manufacturing sector includes all industries under Include a list of green practices

4 5
Section C classified in the Malaysia Standard Industrial indicators that manufacturers
Classification (MSIC) 2008 Ver. 1.0, in accordance to can select, prioritize, implement,
the International Standard Industrial Classification of All measure and monitor their
Economic Activities (ISIC), Revision 4; performance;

12 13 12 4 4 5 6
Medical devices Textiles, Apparels,
& Leather Products &
Pharmaceuticals Footwear

11 1 2 3 3 7 8 9 22
Food, Beverages Wood Products,
& Furniture, Paper
Tobacco Products & Printing

19 20 21 2 7 8 1 5 10 11 13
MANUFACTURING
Transport Equipment Petroleum, Chemical,
& Other Manufactures Rubber & Plastic
Products

6 17 18 9 10 14 15 16
Non-metallic Mineral
Electrical & Electronics Products, Basic Metal
Products & Fabricated Metal
Products

The numbers 1-13 indicate the 13 industries within the scope of the Ministry of International
Trade and Industry (MITI);

The numbers 1-22 indicate the 22 industries under Section C of the Malaysia Standard
Industrial Classification (MSIC) 2008 Ver. 1.0
28 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR
GREEN PRACTICES
GUIDELINE FOR
MANUFACTURING SECTOR
GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 29
INTRODUCTION

Although not without its own constraints, green practices generally aim to create and distribute innovative products and services, use
minimal resources, contain reduced or no toxic substances, produce reduced or zero waste, and create net-zero greenhouse gases
across the entire life cycle of products and services.

This guideline had been designed by considering the various capacities, operations and environmental impacts of the diverse industries
within the manufacturing sector.

To conserve resources including raw

materials, water and energy

To reduce the use of toxic and hazardous

Goals of Green materials in operations, leading to reduction
in quantity and toxicity of emissions and
Practices waste

To reduce greenhouse gases emission

from the Industry

General recommendations are made to enable applicability across various industries, while maintaining a general goal of focusing on the
implementation of green practices by manufacturers in Malaysia.

The steps outlined can be applied to develop action and implementation plans in implementing green practices in existing and future
operations, based on current capabilities and strategies.

30 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

The 5 steps below are recommended for manufacturers intending to integrate green practices into their existing operations and processes:

2 4
DETERMINE INDICATORS ASSESS PERFORMANCE
Six indicators with 18-sub indicators The measured elements will be assessed,
are outlined which can be used by taking note of specific areas for improvement.
manufacturers to determine the relevant
options.

1 3 5
SET OBJECTIVES MEASURE INPUTS, OPERATIONS DEVELOP ACTION PLANS &
Green objectives chosen based on & PRODUCTS IMPLEMENTATION STRATEGY
ambitions and expectations of the Based on selected indicators, manufacturers Based on findings, specific action plans &
company and consumers. can measure the specific elements according to implementation strategies will be developed
identified methodology. including approach, responsibilities & timeline.

Further details can be found in the Guideline Implementation section, starting from page 63.

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 31

GENERAL INDICATORS

As green practices approach is adopted by many entities through a variety of means, it is important to ascertain the performance of the
manufacturers based on specific set of indicators which enable an inclusive comparison. Six indicators were identified based on three
requirements: applicability, measurability, and representative.

Materials Energy Innovation

Non-renewablematerials

Reused materials Energy efficiency Research and Development

Recycled materials Renewable energy Product design

Toxic/Regulated materials

Auxiliary materials

Green Practice for Manufacturers

Wastewater
Policy & program Water consumption
Non-hazardous solid waste
Green procurement Water productivity
Hazardous waste
Human capital
Toxic/Regulated materials
Air emission

Management Water Waste

32 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

GENERAL INDICATORS

Through these
In this guideline:
indicators:
The list of impacts and recommendations is by no means
Manufacturers can identify problems, set targets, measure exhaustive; there are various impacts and associated
performance, understand outcomes, and choose the best recommendations that are appropriate within the scope of
practices to improve their performance. the indicators hence these recommendations are included as
examples to provide an overview of how green approaches can
be implemented within the many operations and processes in
the industry.

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 33

MATERIALS

Manufacturers use various types of materials in their processes. Some manufacturers require the use of virgin materials exclusively,
while others may utilize recycled materials. Long-term survival of manufacturers depends on the efficient consumption of materials. This
is linked with the availability of natural resources and achieving high material efficiency is highly recommended.
Main aspects of
material efficiency
Generate less waste per Reduce the amount Achieve better waste
product regardless of of material used for segregation and
end-of-life scenarios manufacturing through management to move
process improvement up the waste hierarchy
or in-house recycling or steps: Disposal,
reusing recycling, reuse,
minimization and
prevention
This leads
to:

Prevention and Cost and energy savings Transformation of the Reduction of industrial Increased recycling Reduced energy
reduction in extraction in fabrication waste management waste volumes and reusing in waste demands, carbon
and consumption of process, leading to more management emissions & overall
virgin raw materials efficient transportation environmental impact
and disposal of waste

GOALS To focus on reducing the amount of natural resources required to produce finished goods through a cleaner and
AND AIMS more material- and energy-efficient manufacturing processes, leading to overall reduction of waste and emissions.

12.2: By 2030, achieve 12.4: By 2020, achieve 12.5: By 2030,

the sustainable the environmentally substantially reduce
management and sound management waste generation
efficient use of natural of chemical and all through prevention,
resources wastes throughout reduction, recycling
their life cycle. and reuse

34 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

 MATERIALS

ALIGNMENT WITH GREEN TECHNOLOGY MASTER PLAN TARGETS

The efforts towards increasing material resource efficiency as outlined in this Guideline are aligned with the GTMP targets as highlighted
below:

RMKe-12 targets a recycling rate of 40% in Malaysia

Recycling rate by 2025. While in the EU, the target for recycling of
municipal waste is 65% while for packaging waste
2016 2020 2025 2030 is 75% by 2030.
17.5% 22% 25% 28%

SCOPE
The scope for materials (MAT) includes five (5) sub-indicators, Non-renewable Materials (MAT1), Reused Materials (MAT2), Recycled
Materials (MAT3), Toxic or Regulated Materials (MAT4) and Auxiliary Materials (MAT5).

Sub-indicator Definition Impacts Green Practices

Non renewable materials are finite • Security of material supply is • Incorporate the use of
resources and are declining in threatened as non-renewable materials which are renewable,
reserves as they are extracted materials are finite in nature. recyclable and/or recycled into
from the environment to be used • The extraction, processing and existing processes.
in the human economy. transportation of non-renewable • Extending the lifetime of
materials increase the overall product through product design
Non-renewable environmental impact as these may reduce requirement for
Materials activities consumes energy and non-renewable materials.
(MAT1) generate wastes that are dis- Reducing the use of materials
charged into the air, water, and that require high energy
land. consumption.
• Design products that uses
lower amount of virgin
materials.

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 35

MATERIALS

Sub-indicator Definition Impacts Green Practices

Materials that are reused in its • Reduction of waste as • Incorporate product design to
original form without undergoing materials are taken out of the improve lifetime of products to
reprocessing in the form of waste stream. allow the materials to be reused
repurposed either for a similar or • Reducing the overall energy extensively.
different function. consumption during product • Incorporate circular economy and
manufacturing. design into existing operations
• Reducing the environmental by considering the reuse value
Reused Materials
impacts by creating less of materials within the networks
(MAT2)
pollution. of manufacturers, suppliers, and
• Savings for the manufacturers consumers.
through reducing the cost of
purchases and disposal.

Used materials that are • Savings for the manufacturers • Increase incorporation of recycled
reprocessed into new materials as the amount of non- materials into products.
which can then be used in new renewable materials are • Design products to increase
products. reduced in the manufacturing recyclability of products and parts.
process, further reducing the • Use only recyclable materials in
total amount of waste. products.
• Reducing the overall energy • Recycle residues and waste from
consumption during product production processes, within the
manufacturing as it is more manufacturing plant or outside it.
Recycled Materials energy efficient to recycle a • Increase recyclability in term
(MAT3) material than to manufacture it of dismantling and recovery of
from virgin materials. recyclable materials from products
• Savings through reducing the at end of life.
cost of purchase and disposal.

36 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

 MATERIALS

Sub-indicator Definition Impacts Green Practices

Materials that are classified as • Generation of toxic and/or • Avoid the use of harmful
hazardous and/or toxic. hazardous by-products and chemicals in products and use
waste. only when essential.
• Hazardous waste • Incorporating use of materials
management incur more cost that are safe and sustainable by
to the manufacturers. design and throughout their cycle.
Toxic or Regulated
• Harmful emissions produced • Finding an alternative to currently
Materials
during production process. used toxic or hazardous materials
(MAT4)
• Toxic material and waste without jeopardizing the quality of
threatens the health and safety products.
of workers and the public.

Materials that are used for • Spent auxiliary materials may • Avoid or minimize the use of
production or maintenance needs require special management hazardous or toxic materials in
and are not incorporated directly for handling disposal. cleaning or other non-production
into the production output. • Consumed auxiliary materials operations.
contribute to fugitive emission • Minimize the use of periodical
Auxiliary materials may be added of GHG with high global consumables such as batteries,
to the basic materials to extend warming potential. cartridges and containers,
the specific properties to the and liquid materials used for
finished products, or used to maintenance such as coolants or
Auxiliary Materials service equipment and premises, lubricants.
(MAT5) used for supply and marketing or • Switch to eco-friendly materials.
as administrative materials. • Incorporate 3R in offices and
premises.

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 37

MATERIALS

IMPLEMENTATION POTENTIALS

The figure below lists the potential areas TARGET

for improvements in material efficiency Efficient

that manufacturers may adopt in their consumption of
practices: materials

Raw
materials A D
C
Recycling/

E
Recovery
Production
Packaging
materials

Assembly

B
Repair/
Use
C Reuse/
Upgrade
B C
Recycling/ Refurbishment/
Recovery Remanufacture
End Of Life

Waste

Reduce Increase Increase Reduce Reduce

A B C D E
Toxic/ regulated
Non-renewable materials Reused materials Recycled materials Auxiliary materials
materials

Reduce the consumption of Reusing materials such as waste Implement policies, strategies, Wherever possible, substitute Wherever possible eliminate, minimize,
virgin materials for example and/ or consumables within the and programs that support 3R hazardous and/or regulated or reduce use of auxiliary materials
by extending the lifetime premise e.g., customized spill kits implementation within and beyond chemicals with materials that such as packaging. If not possible,
of product through product used on-site the manufacturing premises has lower environmental consider using recycled materials or
design impacts throughout product recyclable materials
or service life cycle

38 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

WASTE AND EMISSIONS

Waste is anything that the generator or holder has no further and is discarded or released to the environment. Waste poses different
environmental risks based on its chemical composition and physical state. In green practices, the strategies and approaches are different
from end-of-pipe treatment as it focuses on prevention or reduction of waste at source.

The general meaning of industrial waste is stated in Section 2 of the Environmental Quality Act 1974 (Act 127) and Regulations which
states, “Waste includes any matter prescribed to be scheduled wastes, or any matter whether in a solid, semi-solid or liquid
form, or in the form of gas or vapor which is emitted, discharged or deposited in the environment in such volume, composition
or manner as to cause pollution.”

Implementing an effective waste management plan requires strategic measures. It must be structured and consider all the stages:
Collection Handling Treatment Disposal

01 02 03 04

Manufacturers must analyze the current collection, handling, treatment, and disposal stages and identify current or potential problems.
Subsequently, specific goals and action plans can be designed and implemented with regular monitoring and reviewing. The waste
management plan should also consider enhancing the knowledge of key stakeholders through effective dissemination of technical
information and research on the environmental impacts of the waste produced.

GOALS To focus on reducing the generation of waste and emissions generated from manufacturing operations by
AND AIMS developing an effective waste management plan.

12.5: By 2030, substantially reduce waste generation through 13.1: Strengthen resilience and adaptive capacity to
prevention, reduction, recycling and reuse climate-related hazards and natural disasters in all
countries

12.6: Encourage companies, especially large and

transnational companies, to adopt sustainable practices 13.2: Integrate climate change measures into
and to integrate sustainability information into their national policies, strategies and planning
reporting cycle

12.8: By 2030, ensure that people everywhere have 13.3: Improve education, awareness-raising and human
the relevant information and awareness for sustainable and institutional capacity on climate change mitigation,
development and lifestyles in harmony with nature adaptation, impact reduction and early warning

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 39

A
W STE AND EMISSIONS

ALIGNMENT WITH GREEN TECHNOLOGY MASTER PLAN TARGETS

The efforts to achieve more efficient waste management in this Guideline are aligned with the GTMP targets as highlighted below:

Increasing number of Waste-to-Energy thermal WASTE-TO- RESOURCE RECOVERY

plant ENERGY

Increasing number of palm oil mills with biogas capture facilities (beyond
500 in 2020)
2020 2025 2030

1 - 3 Initiatives
WASTEWATER • Emphasizing the efficient use of waste as a resource
towards ----------> 2030 TREATMENT • Resource recovery from other sources of organic waste
• Facilitating industry’s growth in resource recovery through Extended Producer
100% sludges to be recycled Responsibility (EPR) initiatives
33% treated effluent to be recycled

SCOPE
The scope for waste (WST) includes four (4) sub-indicators, Wastewater (WST1), Non-hazardous Solid Waste (WST2), Hazardous
Waste (WST3), and Air Emission (WST4).

Sub-indicator Definition Impacts Green Practices

Effluent generated from any • Untreated wastewater can damage • Incorporate sustainability
industrial processes the environment. considerations into existing treatment
• The components of the wastewater processes.
will determine the appropriate • Consider treatment methods that
Wastewater treatment methods. Some methods have lower environmental impacts for
(WST1) may require higher cost for treatment. example GHG emissions.
• Release of untreated waste can • Consider substituting hazardous
cause detrimental impact to the materials within the manufacturing
environment and can be subjected to process to reduce cost of treating
legal enforcement wastewater.
Any waste that is not listed as • Solid waste will eventually end • Increase the use of recycled/ recyclable
Scheduled Waste (according up in landfills and cause many materials within products and auxiliary
Non-
to EQA 1974) including environmental problems. materials.
hazardous
domestic and industrial • Implement the 3R (reduce, reuse, and
Solid Waste
waste. recycle) concept among the workforce.
(WST2)
• Reduce the use of auxiliary materials.

40 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

 A
W STE AND EMISSIONS

Sub-indicator Definition Impacts Green Practices

Waste that meets the • Hazardous waste require special • Choose materials that are less
characteristics of a hazardous handling and treatment. hazardous when feasible.
waste and exhibit any one • Hazardous waste handling • Ensure the hazardous waste
or more of the following and treatment is costly, but is is managed according to
characteristics ignitability, necessary due to its toxic nature. EQA1974 regulations.
corrosivity, reactivity or toxicity. In
Hazardous Waste Malaysia, hazardous wastes are
(WST3) regulated under Environmental
Quality (Scheduled wastes)
Regulations 2005.

Gases and particles which are • Environmental or human health • Minimise the generation of
put into the air or emitted by issue e.g. sulphur dioxide (SO2) gaseous emissions including
various sources. Air emissions from industrial processes and the greenhouse gases, through
also include greenhouse gases burning of fossil fuels contributes process optimization and
(GHGs) that covers seven gases to acid rain, while ozone and substituting green chemicals.
including carbon dioxide (CO2), fine particulate matter lead to the • Choose processes that produce
methane (CH4), nitrous oxide formation of smog, aggravating less emissions during the
(N2O), hydro-fluorocarbons respiratory and cardiac production.
(HFCs), perfluoro-carbons conditions. • Choose raw materials that
(PFCs), sulfur hexafluoride (SF6) • GHG emissions lead to produces less emissions in its
Air Emission
and nitrogen trifluoride (NF3). exacerbation of climate change lifetime.
(WST4)
and its impacts. • Consider carbon capture and
storage technology in existing
process to reduce carbon
footprint of products.
• Venture into innovative
technologies that utilizes
existing emissions to produce
higher valued products such
as production of concrete from
emissions.
GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 41
A
W STE AND EMISSIONS

IMPLEMENTATION POTENTIALS
TARGET
Efficient waste
management for
environmental protection

D
Air or gaseous
waste

Raw materials,
catalysts, solvents Products

Solid waste
Water B C
G
IN
Energy T UR Waste energy
AC SS
N UF OCE
MA PR

Air Water and

liquid waste
A

Reduce Reduce Reduce Reduce

A B C D
Non-hazardous solid
Wastewater Hazardous waste Air emission
waste

Improve wastewater Monitor and manage

treatment systems or utilize Enhance the 3R (reduce, carbon footprint of
Choose materials that are less
water recycling for activities reuse, and recycle) concept products or utilize efficient
hazardous when feasible.
that does not require high among staffs and workers. gaseous waste treatment
quality water. strategies.
42 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR
WATER

Although water covers over two-thirds of the earth’s surface and is renewable on a global scale, local shortages and quality problems
occur frequently. As demand increases, if the water withdrawn for industrial processes is not returned to the same water body in its original
quantity and quality, significant depletion of rivers and lakes as well as a decrease in groundwater tables are expected.

It has been estimated that demand for

freshwater will surpass current water
supply by 40% by 2030 .

- National Adaptation Plan, 2020

There are certain processes and products that require the use of water of varying quality. Although water is may not be consumed directly
in the production process, it is often used indirectly for cooling, heating, or washing. Increasing the rate or recirculation and avoiding
evaporation will reduce the amount required to be utilized from municipal water, groundwater, or surface waters. it is advisable for facilities
to measure how much water is being recycled or recirculated.

GOALS
To focus on reducing raw water consumption through water recirculation or recycling.
AND AIMS

6.3: By 2030, improve water quality by 6.4: By 2030, substantially increase water-
reducing pollution, eliminating dumping and use efficiency across all sectors and ensure
minimizing release of hazardous chemicals sustainable withdrawals and supply of
and materials, halving the proportion of freshwater to address water scarcity and
untreated wastewater and substantially substantially reduce the number of people
increasing recycling and safe reuse globally suffering from water scarcity

6.5: By 2030, implement integrated water 6.6: By 2020, protect and restore water-
resources management at all levels, related ecosystems, including mountains,
including through transboundary cooperation forests, wetlands, rivers, aquifers and lake
as appropriate

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 43

A
W TER

ALIGNMENT WITH GREEN TECHNOLOGY MASTER PLAN TARGETS

The efforts to achieve more efficient waste management in this Guideline are aligned with the GTMP targets as highlighted below :

WATER MANAGEMENT OTHER INITIATIVES

2025 2030 • Water Efficient Product Labelling Scheme (WEPLS) to be

mandatory by 2019. WEPLS is initiated by SPAN which aims to
Integrated river basin 10% (freshwater 15% (freshwater register and label water efficient products.
management abstraction rate) abstraction rate) • 60% of towns in Malaysia installed with Rainwater Harvesting
Systems.
Water treatment and • National NRW Reduction Program where grant incentive is
distribution technology 25% (NRW) 20% (NRW) provided by the Government to promote effective and consistent
*Non-revenue water (NRW): Water that is lost before it reaches the NRW reduction based on targets set by SPAN.
customer

SCOPE
The scope for water (WTR) includes two (2) sub-indicators, Water Consumption (WTR1) and Water Productivity (WTR2).

Sub-indicator Definition Impacts Green Practices

The amount of water consumed • Increase production cost • Improve water usage efficiency.
within the facility. • Increase generation of • Monitor and increase the usage of
wastewater. recycled or reused water.
Water Consumption
(WTR1)

This sub-indicator links the • A low level of water • Increase the level of water
water consumption with productivity indicates that recirculation and reuse within and
the product yield; hence water is of low value and between industries through industrial
Water Productivity
the economic value of the may be used for low value symbiosis.
(WTR2)
industrial production can be purposes. • Improve process design based on
measured based on the water • Water footprint increases with targeted water productivity.
withdrawn. lower water productivity. • Adopt cleaner production processes
that optimizes the use of water.
44 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR
 A
W TER

IMPLEMENTATION POTENTIALS

TARGET

Efficient
consumption of
materials

Production
water B Process water

Lost water through Embedded water to Washing, boiler

evaporation or convert raw material blowdown water, B
spillage into intermediate coolant water, rinsing
and finished e.g. water from clean- Renewable
in-place systems
products water

Reusable water
A System water
Recyclable water
Lost water through maintenance Discharged water from
of production equipment and cleaning production apparatus
environment and equipment
A Non-renewable
water
Non-production
water Effluent
Facility water Utility water
Maintenance of Domestic use
transport vehicle

Heating and Sanitation

cooling

Reduce Increase
A B

Water consumption Water productivity

Deploy use of greywater Increase the level of water

in appropriate operations recirculation and reuse within
or processes through and between industries
rainwater harvesting. through industrial symbiosis.
GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 45
ENERGY

Global data have consistently indicated that energy consumption remains the largest contributor of greenhouse gases (GHGs) with a
sectoral share of about two-thirds of total global emissions.

Within this broad sector, we can break contributions by sub-sectors like transport, buildings, industry-related energy consumption,
agriculture, and several unallocated and fugitive emissions. Industry-related energy consumption make up about a quarter of the total
sectoral emissions and this almost in entirety come from manufacturing. Majority of global population still rely on vehicles powered by
fossil fuels. The adoption of electric vehicles (EVs) could significantly shift dependency internal combustion engines (ICE). This draws new
attention to impacts from electricity generation.

Coal mined from Coal-fired Electricity

the Earth Power Plant Transmission

Although electricity generation technologies is constantly improving along with the rapidly growing production volume, but in reality,
majority of electricity generated still originates from fossil fuels. Renewable energy such as solar, wind, hydro, geothermal, and other
renewable sources is gaining global traction but still remains as an alternative in many instances. The urgent need to shift dependency of
energy from fossil fuels to renewables remains prevalent, as is energy transition.

Through the planned National Energy Policy, the generation of renewable energy from solar, biomass and biogas are aimed to increase up
to 31% of capacity in 2025. This will be achieved through several planned Acts related to energy efficiency and conservation to supervise
energy consumption by high-intensity consumers in the industrial and commercial sectors.

Therefore, actions must be taken at the facilities to ensure that the intensity of energy consumption will decrease sufficiently so that even
with increased production, the total energy consumption remains stable or decreases, leading to sustainable environmental protection and
reduced overall energy costs.

46 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

 ENERGY

GOALS To focus on reducing overall energy efficiency and the adoption of renewable energy in manufacturing processes,
AND AIMS facilities, operations, and management.

7.3: By 2030, double the global

rate of improvement in energy
efficiency

ALIGNMENT WITH GREEN TECHNOLOGY MASTER PLAN TARGETS

The efforts to achieve more efficient energy management in this Guideline are aligned with the GTMP targets as highlighted below:
WATER MANAGEMENT OTHER INITIATIVES

2025 2035 • Electricity generation diversity: Maintaining Herfindahl-Hirschman Index

31% 40% (HHI) below 0.5
Renewable Energy RE mix (installed RE mix (installed • Reducing carbon emission from power plants: Imposition of clean coal
capacity) capacity) technology requirement for new coal-fired plant
• Reinvigorating co-generation policy
Peninsular Malaysia 24% 30% • National Energy Efficiency Action Plan (NEEAP)
solar penetration

Promotion of 5-star rated appliances Promotion of 5-star rating and labels

• Refrigerator
• Air conditioner

Minimum Energy Performance Standards (MEPS) Promotion through awareness programs, enforcement of MEPS and
• EE lighting campaign labelling
• High efficiency motors

Energy audits and energy management in buildings and industries Matching grants: free energy audit will be provided to large and medium
• Large and medium commercial buildings sized commercial buildings, industries, large Government facilities;
• Large and medium industries provided that the business owner is willing to invest an amount of
• Large Government facilities energy saving measures equal to the cost of the energy audit
• Medium-sized commercial buildings

Co-generation To promote co-gen in industries and commercial buildings

• Co-gen in industries and commercial buildings

Total savings in 10 years (GWh) = 49,943

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 47
ENERGY

SCOPE
The scope for energy (ENR) includes two (2) sub-indicators, Energy Efficiency (ENR1) and Renewable Energy (ENR2).

Sub-indicator Definition Impacts Green Practices

Maintain the same of less • Energy production depletes • Minimize energy consumption
amount of energy consumption to non-renewable energy during use phase by using the
produce better outputs. resources and contributes lowest energy consumption
to high greenhouse gases components, using the
emissions due to current energy default power saving mode,
mix which includes significant and insulating the heating
percentage of polluting sources. components.
• High energy consumption adds • Optimize energy flow in the
to the operation and overhead production processes through
costs. heat optimization
• High energy consumption leads • Utilizing waste heat.
to high demand of electricity, • Reduce energy consumption and
causing the utility generates emissions from transportation
more electricity to cater for the and avoid methods of
demand. transportation that are harmful to
Energy Efficiency • Inefficient energy consumption the environment.
(ENR1) hinders optimum renewable • Implement automation of
energy design. processes.
• Energy efficiency is the single • Utilization of new or existing
most cost-effective productivity technologies including heat
tool available within an energy integration, co-generation and
portfolio enabling creation of renewable energy.
products and services with the • Conduct energy audits to identify
lowest energy cost. feasible energy saving options
applicable in the operations or
processes.

48 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

 ENERGY

Sub-indicator Definition Impacts Green Practices

Energy from a source that is not • Reduces the carbon footprint • Utilization of renewable energy
depleted when used such as of the manufacturer and the from process residues (waste
solar, wind or biomass, among products. materials, waste heat or solid
others. • The production, transportation waste), or from auxiliary facilities
or use of non-renewable energy (solar, wind or equivalent).
resources such as fossil fuels • Application of waste-to-energy
generates significant amount of technologies.
greenhouse gases. • Facilitate circular economy
• Reduces the negative through resource sharing and fuel
environmental impacts of non- optimization.
renewable energy. • Utilization of new or existing
• With carbon tax mechanism, technologies including heat
manufacturers are facing higher integration, co-generation and
tax when using fossil-based waste utilization for energy.
energy as electricity or fuels.
• Enables waste to be upgraded to
energy resources, thus reducing
Renewable Energy dependence on the electricity
(ENR2) grid, and saving energy costs.
• Reduce the amount of waste that
needs to be treated.
• Increase the waste value.

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 49

ENERGY

IMPLEMENTATION POTENTIALS
TARGET
Efficient
utilization of energy
in manufacturing
processes

A C D F
Processes
E G
Energy input Total energy
(fuel, electricity) loss
Process 1 Process 2

Raw materials Products

Increase Increase

Energy efficiency Renewable energy

Conduct energy audits to identify feasible

Application of solar energy to increase RE in
A energy saving options applicable in the E fuel mix and reduce GHG emissions
operations or processes.

B Reuse and recycle materials F Retrofit old technologies with energy efficient
ones

C Reduce heat loss

Integration with renewable energy options such
G as solar PV, and biogas generation
D Utilize heat to other process

50 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

INNOVATION

Manufacturers are driven to adapt their business processes and activities to develop marketable, viable, and effective products as global
competition intensifies.

The innovation indicators include research and development efforts into green technology and its implementation directly in the
manufacturing sector, as well as product development phases which incorporates green product design.

GOALS To support, recognize and advocate green innovations and sustainable practices within the traditional manufacturing
processes and operations. It supports the goals of Green Practices through efforts and financial commitments in
AND AIMS research and development (R&D) and product design.

9.5: Enhance scientific research, upgrade the technological capabilities of industrial

sectors in all countries, in particular developing countries, including by 2030,
encouraging innovation and substantially increasing the number of research and
development workers per 1 million people and public and private research and
development spending

9.7: Support domestic technology development, research and innovation in developing

countries, including by ensuring a conducive policy environment for, inter alia, industrial
diversification and value addition to commodities

ALIGNMENT WITH GREEN TECHNOLOGY MASTER PLAN TARGETS

The efforts towards implementation of innovation in the manufacturing operations as outlined in this Guideline are aligned with the GTMP
especially as one of the five strategic thrusts of:
• Strengthening the institutional framework
• Provide a conducive environment for green technology development
• Intensify human capital development in green technology
• Intensify green technology research and innovations, and
• Promotion and public awareness

Through Research, Development and Commercialization efforts

Malaysia had developed the National Research and Development Priority Areas (NRPAs) which steers the common vision for Science,
Technology and Innovation in Malaysia, measured through Gross Domestic Expenditure on R&D (GERD) amounted to RM10.6 billion in
2012 (36% from the public sector and 64% funded by the private sector). It is aimed that the country achieves a minimum of 2% GERD

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 51

INNOVATION

SCOPE
The scope for innovation (INO) includes two (2) sub-indicators, Research and Development (INO1) and Product Design (INO2).

Sub-indicator Definition Impacts Green Practices

Activities or efforts that tackles specific • R&D allows new and emerging • Develop and implement policies related
issues to innovate products or services. technologies to be applied directly to allocation of resources towards R&D
R&D may require resources both in into processes, to further increase within the organization.
terms of financial and material, and time. productivity, and improve products. • Making strategic investment in R&D
R&D may also result in the production of and innovations that enable green
Research and
scientific papers, intellectual properties, technologies to be embedded into
Development
and new knowledge. existing infrastructure, systems, and
(INO1)
processes.
• Collaborative efforts with academia to
improve products and processes.
• Knowledge transfer efforts with
international bodies and industries.

The process of developing a specific • Extending the lifetime of products • Optimize product lifetime by increasing
product that addresses the specific needs will decrease the need for new reliability and durability.
of the market. products which subsequently will • Incorporates product design that
decrease materials and energy stimulates sustainable behaviour.
consumption for production. • Design for easier maintenance and
repair (e.g., indicate opening instructions
for cleaning and repair, allow wear
location to be detected on parts which
facilitate disassembly and replacement).
• Design a modular product structure,
Product Design enabling upgrade and prolonging
(INO2) products lifetime.
• Designing future-proof products with
long functional and aesthetic life span.
• Design products to meet possible future
needs of consumers.

52 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

 INNOVATION

IMPLEMENTATION POTENTIALS
TARGET
To inculcate the culture
of innovation in the
manufacturing sector
• Sustainable processes
• Advanced process technologies
B • Integrated processes
• Improved process performance
• Sustainable materials for products
• Advanced product design
• Effective product disassembly/ recovery Product Process
• Modular and reconfigurable design
innovation innovation

System
innovation

• Sustainable systems
• Enterprise level system integration
• Supply chain integration

Increase Increase
A B

R&D Product design

Utilizing product design to incorporate

Optimization study to improve quality and/or
sustainability thinking but maintaining the
longevity of product
functionality of products
GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 53
MANAGEMENT
The administration of an organization, company or business is crucial in creating the right forward-thinking policies that support the
development of a more sustainable form of business. All stakeholders, including employees and customers benefit from taking measures
to reduce the negative impacts of the manufacturing process towards the environment.

Being environmentally responsible entails more than just meeting legal requirements; it also means going beyond compliance and investing
more in human capital and management practises that contribute to the industry’s green initiatives.

The world is moving towards green economy particularly through ESG frameworks and investment systems which are changing the
current scenario of job creation, skills evolution, and job quality.

GOALS To focus on development and implementation of green policies, practices, and systems that stimulate the creation
AND AIMS and availability of green jobs within the organization.

8.3: Promote development-oriented policies

that support productive activities, decent job
creation, entrepreneurship, creativity and
innovation, and encourage the formalization 12.7: Promote public procurement practices that
and growth of micro-, small- and medium- are sustainable, in accordance with national
sized enterprises, including through access to policies and priorities
financial services

8.6: By 2020, substantially reduce the

proportion of youth not in employment,
education or training 12.10: Develop and implement tools to monitor
sustainable development impacts for sustainable
tourism that creates jobs and promotes local
8.8: Protect labour rights and promote culture and products
safe and secure working environments for
all workers, including migrant workers, in
particular women migrants, and those in
precarious employment

54 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

 MANAGEMENT

ALIGNMENT WITH GREEN TECHNOLOGY MASTER PLAN TARGETS

The efforts towards management elements in the manufacturing operations in this Guideline are aligned with the GTMP targets as
highlighted below:
Promotion and Market Human capital
awareness enablers development

Industry and • Government • Capacity building

business promotion Green in the public and
via International Procurement private sector
Greentech & Eco • Green incentives • Collaboration with
Products Exhibition • Innovative higher education
and other platforms financing institutions
• Green cities
• International
collaborations

Number of green manufacturers Under the classification of green manufacturing, manufacturers can decide and prioritise their initiatives towards
green energy, green products and green processes based on their level of business readiness.
2025 2030 Initiatives developed by the government to propel such choices include the MyHijau SME & Entrepreneur
Development Program, Energy Audit Grant for industrial sector, Energy Management Gold Standard (EMGS),
10,200 (30%) 17,000 (50%) Enhanced Time of Use tariff (EToU) and ISO 14001 certification, among others.

SCOPE
The scope for management (MGT) includes three (3) sub-indicators, Policy and Program (MGT1), Green Procurement (MGT2) and
Human Capital (MGT3).

Sub-indicator Definition Impacts Green Practices

Conformance to industry • Ensuring the manufacturing • Promotion of recycling and
standards in environmental process and operations safe reuse practices, along with
management and compliance and not detrimental to the other sustainable environmental
to safety regulations. In environment. management practices among
addition, additional initiatives • Being partly eligible for employees of the organization or
Policy and Program such as developing green various local and international company.
(MGT1) metrics within the organization sustainability awards. • Raise awareness of responsible and
or conducting in-house and sustainable consumption through
external programs to support internal campaigns.
the green initiatives are also • Develop green policies or operating
included. standards that are applicable to all
aspects of operations within the
organization.
GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 55
MANAGEMENT

Sub-indicator Definition Impacts Green Practices

Procurement of materials, • Promote purchases that have • Purchase environmentally

products, services and works low environmental impact and friendly products and service.
that take into consideration are more sustainable. • Include environmental
the environmental criteria that • Increase resource and requirements in specifications
minimizes the adverse impacts of operational efficiency. with contractors, suppliers, and
Green Procurement human activities. • Eligibility to be recognized service providers.
(MGT2) under the Government Green • Establish a mechanism to
Procurement program. determine level of greenhouse
gas emissions generated by
suppliers.

The creation and availability of • Challenging to implement • Open opportunities to the current
green jobs and competent person green technology in workforce to become competent
at the managerial, technical and/or manufacturing processes and person for environmental
professional levels. operations without availability management and green
It also includes capacity of green workers and related practices.
building and training for the competent person. • Implement policies, practices,
existing workforce to enhance • The trajectory of ESG and systems that stimulate the
skills, capabilities, attitudes, indicates the growing creation and availability of green
and commitment in green and significance of having jobs within the company.
sustainable practices in the green workers within the • Inculcate green practices in
Human Capital organization. organization. functions and management of
(MGT3) • Current demand for green human resource.
human capital. • Development of career paths
for competent person related
to environment protection
and climate action such as
environmental auditor and that of
similar roles.

56 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

 MANAGEMENT

IMPLEMENTATION POTENTIALS
TARGET

To empower the
management and
employees towards green
practices

A C
Strategic Initiatives

B BusinessOperations

B C Manufacturing / Production Operations

C Manufacturing / Production
Increase Increase Increase
A B C

Policy and program Green procurement Human capital

Raise awareness of responsible Procure of materials and products Open opportunities to the current
and sustainable consumption from suppliers with green or eco workforce to become competent
through internal programs and labelling. person for green practices.
CSR campaigns.

v
GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 57
FRAMEWORK OF STRATEGIC APPROACH

58 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

FRAMEWORK OF STRATEGIC APPROACH

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 59

INDICATORS ALIGNMENT WITH EXISTING POLICIES, BENEFITS AND
RECOGNITIONS
In this section, a framework is introduced to help industries in recognizing the various certificates, recognitions and benefits that exists
within Malaysia. Using this framework, manufacturers can refer to the specific guidelines and best practices that support the application
of green practices in the industry. Manufacturers can also refer to the indicators that align with the various existing initiatives.

60 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

INDICATORS ALIGNMENT WITH EXISTING POLICIES, BENEFITS AND
RECOGNITIONS

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 61

INDICATORS ALIGNMENT WITH EXISTING POLICIES, BENEFITS AND
RECOGNITIONS

62 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

GUIDELINE IMPLEMENTATION

As described in the Introduction (page 31), there are five steps outlined in these guidelines for manufacturers. These five steps can
be divided further into three main stages, namely ‘Preparation and Target Setting’, ‘Monitoring and Evaluation’ and ‘Action Plan and
Implementation Strategy’.

ACTION PLAN AND

IMPLEMENTATION
STRATEGY
5. Develop
Action
Plans and 1. Set Objectives
Implementation PREPARATION AND TARGET
Strategy SETTING

4. Assess 2. Determine
Performance Indicators

3. Measure
inputs,
operations and
products
MONITORING AND
EVALUATION

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 63

STAGE 1: PREPARATION AND TARGET SETTING
Manufacturers must start by setting the objectives and targets based on a general understanding of all the positive and negative
environmental impacts of the existing processes, operations, equipment, materials, waste, and facilities.

A B C D
Map current Identify business risk Prioritize area of Set targets and
practice with its and opportunities intervention objectives
environmental
impacts

Set targets and objectives

• Based on specific need of the organization or premiss,
determining the objectives provides the specific direction into
which the audit process may help
• Eg: To identify and list specific energy issues faced by Factory A

Once the objectives are identified, the manufacturer should determine the indicators (using the 6 indicators and 18 sub-indicators listed
before which are aligned with the previously selected targets and objectives.

Once specific indicators are selected, the data collection method and the expected outputs must be determined before proceeding to the
next stage which involves the actual measurement of the indicators and performance assessment.
Determine data methodology Determine the required outputs
• Once the objectives were determined, the • Based on the aim of the audit, required outputs
appropriate approach can be selected. Major should be listed.
requirements are the location selection (which • Eg: List of materials, sources and factors of
determines the audit boundary), methods material wastage and energy loss, risk type
of data collection (on-site observation or and sources
documentation), required documents (process
flow diagrams, site plan) and tools used (field
sensors, checklist).

64 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

STAGE 2 : MONITORING & EVALUATION

The actual measurement and evaluation will be conducted based on the specific methodology previously determined.

Current standards and guidelines form the basis for benchmarks, where the measured data can be compared.

The performance and impact of each indicator will be evaluated, followed by listing the potential actions which could mitigate or enhance
impacts of the specific indicator.

Specific recommendations as outlined in these guidelines can be used as a guide of potential interventions for each sub-indicator as its
performance will be assessed.

STAGE 3 : ACTION PLAN & IMPLEMENTATION STRATEGY

In developing the action plan and implementation strategy, the specific action must be duly detailed to include the specific goals, division
of tasks and responsibilities, timelines and resources.

Appropriate communication and motivation systems are also suggested to be established to ensure that the goals of the green manufacturing
practices can be achieved in a timely and successful manner.
Indicator Target Setting Monitoring and Action Plan Responsibility and
Evaluation Timeline
MATERIALS Increase usage of recycled Monitor and record trend of Identify recycling companies Marketing Department to screen
Recycled materials materials in specific products. recyclable material used. to secure supply or materials. potential companies and create
database by Oct 2022.
WASTE AND EMISSION Carbon emission at Monitor air quality at Implement CCS system. Environmental Officer to monitor
EXAMPLE

Air emission minimal level. emission source. weekly and quarterly report.

ENERGY Reduction of energy Monitor and record To implement new SOP for HR Dept to develop SOP for air-
Energy consumption consumption in offices. monthly electricity bills and electrical appliances in the conditioning and energy habits in
consumption rates. office. company office by Sept 2022.

INNOVATION Increase R&D expenditure Evaluate current R&D Identify strategic partners Finance Dept to report current
R&D in green technology. expenditure and tangible for new mixing system that and past R&D spending.
benefits. is more energy-efficient. R&D Dept to identify strategic
partners.

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 65

TOWARDS GREEN RECOGNITION AND CERTIFICATION
This guideline describe the recommendations and proposed actions that can be adopted by manufacturers to implement green practices
in their daily operations. This is driven by the eventual development of a Green Certificate which recognizes green practices in the industry.

The Green Certificate Roadmap is proposed as shown below. This roadmap is developed to ensure that the industry is facilitated in
implementing green practices within their operations.

Sector Leading Indicators

Identification & Sustainability
Performance Self Monitoring & Green
Identification Reporting Recognition
& Certification

Green
Strategic
Performance
Preparation & Action
Evaluation
Target Setting Implementation
&
Outcomes

Suggestion period within a year depends on assessment stage implementation towards green certification.

In the long term, it is envisioned that manufacturers who have implemented green and best practices in the industry may apply for the
Green Certificate, and being eligible for, as of now, proposed financing benefits and support. In the short term, manufacturers may refer
to the table in pages 60-62 for potential benefits and recognitions that they are eligible for based on their current performance.

CHALLENGES IN IMPLEMENTATION OF GREEN PRACTICES GUIDELINE

Despite the benefits of implementing green practices in the industry, it is undeniable that there are some challenges that hinder immediate
applicability of the Green Industry.

• The lack of awareness and knowledge about green technology leads to the perspective that green innovations are costly and require
complete overhaul of businesses.
66 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR
 CHALLENGES IN IMPLEMENTATION OF GREEN
PRACTICES GUIDELINE
• Those motivated to spearhead the green initiatives face a lack of advisory support, absence of financial incentives and policy
implementation, experienced verifiers and longer rates of return for their investments.
• Weak public pressure on green products or processes may also create barriers towards the adoption of green manufacturing, other
than supply barriers and poor supplier commitment.

It is crucial that an enabling environment can be achieved where strategic partnerships are made among all stakeholders (industry,
government, academia and the public) to develop the regulatory and institutional framework, the fiscal instruments of incentives and
investment mechanisms, the capacity, and public advocacy in terms of the green market.

Tax incentives and fiscal measures to greenify High Capital Cost

the industry

ESG policies by trading partners and global Lack of knowledge and awareness on benefits
consumers of green technology

Pro-green policies including low-carbon and Lack of trained personnel and scant green job
energy opportunities
ENABLERS CHALLENGES
Education and capacity building in green Misalignment of short-and long-term strategic
technology goals

Strategic partnerships for knowledge transfer Technological barriers

and echnology diffusion

Clear and inclusive scoring system for Green Resistance to change

Certificate

To ensure an enabling environment, three stages are identified, namely Development, Facilitation, and Implementation. Therefore, the
development of this guideline falls under the first stage of Development and within the element: governance, and policy planning.
Sets the stage for any approaches that allows various entities to diagnose the current situation and plan a strategic framework. It is
Development aimed at low-hanging fruits; such as education and capacity building at a systemic level and require long term commitment before
Stage the impacts can be seen. Manufacturers and industries can start by analysing their current performance and creating their own green
strategies while relevant authorities assess local efficiencies and develop interventions based on capacity and available resources.

Involves an assessment of actions taken during the initial stages and performance of all strategic partners. This provides a foundation
Facilitation in developing financial mechanisms to increase buy-ins from the industry, as well as communication strategies to facilitate adherence to
Stage new green regulatory framework. A clear cost-benefit analysis, both monetary and non-monetary, must be in place.

Describes the requirement for a clear advisory support system with full capacity to fund and implement the program. Another key item
Implementation is the scoring mechanism for the Green Certificate which the industry must adhere to before they can be awarded. Only once all these
Stage capacities are in place, can the Green Certificate Scheme be implemented successfully.

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 67

CREATING AN ENABLING ENVIRONMENT

68 GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR

WAY FORWARD

Sustainability and Environmental, Social, and Governance (ESG) policy is especially important across all sectors. The concern about
climate change, social justice, corporate responsibility are drivers for actions especially for manufacturers and businesses.

ESG is also good for business as companies with consistently high ESG performance tend to score higher total shareholder return than
medium ESG performers.

Manufacturers who take the initiatives towards sustainability and ESG through this Guideline may expect cost savings and increase in
profitability, along with increasing goodwill and reputation. Incorporating these initiatives as formal policies, as a conclusion, is a strategic
business move and will empower your company to navigate into the next decade and beyond, of change in manufacturing.

GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 69

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GREEN PRACTICES GUIDELINE FOR MANUFACTURING SECTOR 71