Ministry of Defence Malaysia is preparing to adopt a structured Environmental, Social and Governance (ESG) framework, signaling a shift toward greater transparency, sustainability, and institutional accountability in the public sector. Defence Minister Mohamed Khaled Nordin said the initiative aims to close long-standing gaps between public-sector governance practices and the more mature ESG standards seen in leading private companies.

The move reflects growing recognition that governance, transparency, and sustainability are no longer optional for public institutions, even in traditionally sensitive sectors such as national defence. The question now is whether ESG principles can be meaningfully embedded into defence governance without compromising security imperatives.

Learning from Private-Sector ESG Practices

Mohamed Khaled noted that many private companies have demonstrated how strong ESG implementation can improve resilience, competitiveness, and stakeholder confidence. Practices such as transparent procurement, digitalisation, sustainable operations, and stronger protections for workers’ rights were cited as benchmarks the ministry intends to learn from.

According to the minister, ESG success in the private sector has not been driven by compliance alone, but by leadership and disciplined execution. He argued that similar leadership-led adoption is now necessary within the defence establishment to enhance credibility and public trust.

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A Structured Shift in Defence Governance

The Defence Ministry’s ESG push is expected to move beyond ad-hoc initiatives toward a more holistic and formalised framework. Mohamed Khaled emphasized that adopting ESG principles would require a “fundamental reset” in institutional thinking, including moving away from outdated governance models, excessive bureaucracy, and opaque decision-making processes.

He stressed that national security concerns should no longer be used as a blanket justification for avoiding openness or sustainability, suggesting that transparency and accountability can coexist with security requirements when properly designed.

Task Force to Design Defence-Specific ESG Framework

To guide implementation, the minister called for the establishment of a special task force tasked with developing an ESG framework tailored specifically to national defence. This framework is expected to address governance integrity, environmental responsibility, workforce standards, and ethical conduct across the defence ecosystem.

The objective, Mohamed Khaled said, is to elevate the Defence Ministry’s institutional standing and align it with global expectations around responsible governance, particularly as ESG principles increasingly influence public trust, investor perceptions, and international partnerships.

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Integrity and Anti-Corruption as Core Pillars

At the heart of the proposed ESG framework is a renewed emphasis on integrity. The minister underscored that ESG adoption must be accompanied by a comprehensive and uncompromising approach to combating corruption and misconduct at all levels of the defence system.

Looking ahead, Mohamed Khaled expressed hope that 2026 would mark a turning point for the ministry, anchored in integrity, accountability, and a renewed sense of public service. If implemented effectively, the initiative could position Malaysia’s defence sector as a rare example of ESG integration within national security institutions, setting a precedent for other public-sector bodies in the region.

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