My Impact Insights

The State of
Impact in Malaysia

Findings

About The Study

This study offers a glimpse into the evolving landscape of impact capital in Malaysia. This project was initiated as an advocacy tool to help grow the impact investment movement in the country and foster meaningful conversations. While global interest in impact investing has surged, Malaysia’s ecosystem remains nascent yet brimming with potential. Our goal is to share the collective thoughts of key impact capital providers, giving you a clearer picture of where we are and where we’re headed.

Whether you’re just starting your journey in impact investing or are already making strides, our findings aim to reassure you that you’re part of a larger movement.

Our findings are accessible to all as we hope to inspire coordinated efforts that optimise resources, drive innovation, and ultimately transform the landscape of impact investing in Malaysia.

Our Outreach

This study focuses on a specific segment of Malaysia’s impact investment ecosystem – primarily private capital providers, including investors and philanthropic foundations. This group encompasses venture capital funds, private equity firms, family offices, foundations as well as government-linked company (GLC) foundations that have demonstrated significant interest, experience, or influence in the impact investment space.

It’s important to note that our reach was limited to this close-knit circle, as the broader landscape remains somewhat uncharted. We hope this study serves as a starting point for broader conversations and deeper exploration into Malaysia’s impact investment community.

We invite anyone with insights or experiences related to Malaysia’s impact investment space to step forward and contribute. Your input can help strengthen and expand this ecosystem. Reach out to us to become part of this growing movement!

Total Participants in the Study

13

Corporate/ Non-Corporate Foundations

6

Venture Capital Firms

3

Family Offices

3

Private Equity Firms

Image Source - Paul Allis Amazing for Earth Heir

Our Approach to Understanding Impact Investing

The world of impact investing can be complex, with many stakeholders navigating their own paths. In this study, we’ve developed a set of guiding principles to better understand what impact investing is all about. These principles serve as a foundation for our insights and establish clear boundaries on what to focus on, ensuring that the data we gather is both relevant and actionable within Malaysia’s context.

As we explore this dynamic space, these guiding principles will help highlight the complexities of impact investing, making it easier for all stakeholders to grasp its nuances.

Intent: Drive specific social or environmental outcomes, where impact is central, not secondary.

Relevance: Address challenges pertinent to Malaysian communities, particularly in areas where funding or resources are limited

Inclusivity: Meet the diverse needs of current and future generations across various sectors and communities

Comprehensive: Consider all forms of financial and non-financial capital contributing to impact, ensuring clarity on their intended use and purpose

Flexibility: Recognise the unique nature of each impact project, adapting to different capital needs and development trajectories 

Accessibility: Ensure resources and data are readily available to drive informed decisions, actionable insights and measurable impact

Contextual Awareness: Understand the local contexts, including challenges and opportunities, to shape targeted, effective impact strategies

Expertise: Leverage specialised knowledge or sector-specific expertise to drive impactful solutions that generate lasting change

Societal Shift: Remain adaptable to shifts in sectors or thematic areas, responding to evolving trends and changing community needs

Impact Investing in a Nutshell

Impact investors exhibit a range of traits and motivations, adopting diverse strategies and approaches to achieve their investment and impact goals

Various vehicles, such as social enterprises, intermediaries and blended finance structures, are utilised to deploy impact capital, supported by a range of business models (from for-profit to non-profit), to achieve the intended social or environmental outcomes

Communities or individuals who directly or indirectly benefit from the capital deployed. Their active participation, feedback and needs help shape informed decisions, ensuring that solutions remain relevant and effective in addressing local challenges

The emergence of impact investing

Pre 2000s

Emergence of Ethical and Socially Responsible Investing

1950s

Ethical investing began as investors excluded companies involved in tobacco, alcohol or gambling due to moral concerns, particularly within religious and socially conscious groups.

1960-90s

Socially responsible investing(SRI) emerged with the rise of negative screening and shareholder advocacy. SRI was later institutionalised with the creation of ethical investment indices (e.g. FTSE4Good in 2001)

2000s

Foundation of Impact Investing

2000s

The Environmental, Social and Governance (ESG) investing framework introduced, focusing on evaluating companies based on their ESG factors, rather than merely their financial performance.

2006

Launch of the UN Principles for Responsible Investment (PRI) framework to encourage institutional investors to consider ESG factors in their investment decisions.

2007

The term “impact investing” was coined by The Rockefeller Foundation, marking the formal recognition of investments aimed at generating social and environmental benefits alongside financial returns

How the impact landscape has evolved in Malaysia

1970s-2000s

Early traction of CSR

1970s

Corporate Social Responsibility (CSR) in Malaysia began taking shape, primarily focused on philanthropic efforts.

2006

Bursa Malaysia introduced the CSR Framework, mandating publicly listed companies to disclose their CSR activities, marking a pivotal shift towards formalised CSR practices in the country.

2010s

Emergence of Social Innovation & Social Entrepreneurship

2008

Yayasan Inovasi Malaysia (YIM) was established to cultivate grassroots innovation to enhance the well-being of society, particularly improving the quality of life for the B40 group.

2010

Agensi Inovasi Malaysia (AIM) was established to promote social innovation, support social enterprises, and enhance collaboration among stakeholders.

2013

Malaysian Global Innovation and Creativity Centre (MaGIC) was established and launched its Social Entrepreneurship Program to catalyse social enterprise sector in Malaysia.

2017

Malaysia launched Social Outcome Fund (SOF), becoming the first country in Asia to involve corporations and foundations in decision-making for social impact investments

ESG vs Impact Investing What is the difference?

While both ESG and impact investing aim to promote positive outcomes, they differ fundamentally in their focus, measurement approaches, and investment objectives. ESG investing serves as a framework for assessing risks and opportunities, whereas impact investing is a proactive strategy aimed at generating measurable positive change. Understanding these differences helps investors align their capital with their values while pursuing both financial returns and meaningful societal impacts.

ESG Investing

  • Focuses on evaluating how companies manage risks and opportunities related to environmental, social and governance factors.
  • Primarily aims to minimize risks while maximizing financial returns.
  • More prevalent in public markets and involves screening companies based on adherence to predetermined ESG criteria.

Impact Investing

  • Intentionally seeks to generate measurable social or environmental benefits alongside financial returns, often where impact is prioritised.
  • Primarily aims to create positive change through the capital allocation, deal structuring, and portfolio contribution.
  • More towards direct funding of ventures that address social challenges with clear outcomes, supported by the rise of outcome-based funds, social impact bonds and similar financial instruments.

The spectrum of impact-driven capital

Despite the growing traction in ESG adoption due to regulatory pushes, the impact investing landscape remains unclear and underexplored. While sustainability related regulations enhance transparency, the impact investing ecosystem is developing organically, supported by government initiatives like AIM and MaGIC that have spurred impact-driven enterprises. This foundation has built an ecosystem rich with potential, waiting to be explored by impact capital providers eager to make meaningful contributions to social and environmental outcomes.

The adoption of sustainable and impact investing has given rise to a broad spectrum of capital deployment approaches, ranging from traditional philanthropy to conventional investing. This spectrum reflects a growing recognition among investors that financial returns can be achieved alongside positive social and environmental outcomes.

The spectrum of impact-driven capital

The impact ecosystem in Malaysia

Insights from investors

12

Survey respondents

67%

are in a venture capital or private equity setting

67%

with fund size of more than RM100 million

Image Source - Landik

Quick pulse on ESG adoption

Top 2 drivers of ESG adoption:

  • Create long term value
  • Ethical considerations

33%

have dedicated ESG resources

83%

are actively adopting ESG principles with majority in early stages of which…

30%

evaluates ESG factors when making investment decision

27%

tracks ESG performance post investment

19%

reports on ESG performance

State of impact investment

92%

are very or somewhat familiar with concept of impact investment

Processed Engineered Fuel (PEF) Source - Materials In Works

67%

currently engage in impact investment activities of which..

RM10 bil

worth of funds allocated (collectively) for impact investment

Top Sectors

Education, Health care and Economic empowerment

40%

collects only basic data on outcome

Top wishlist

  • Learning opportunities in impact investment.
  • Stronger pipeline of investable impact ventures.
  • Clear guidance on impact reporting.
  • More success stories from collective efforts.
  • More like-minded funders or capital providers.

Our observation

The investment community in Malaysia is still in the early stages of embracing the ESG landscape. For some, there is often confusion about equating ESG strategies directly with impact investing. While ESG considerations are important, impact investing goes further by aiming to create measurable social or environmental outcomes through investments in solutions that address critical societal challenges. According to the Global Impact Investing Network (GIIN), impact investing is poised to grow rapidly as more investors seek solutions to pressing global challenges like climate change, inequality, and access to healthcare and education.

Despite the strong desire to create positive change, many investors in Malaysia, similar to those in other emerging markets, are still navigating the complexities of impact investing. One key challenge is the lack of a universally accepted definition of impact, which makes it difficult to align strategies with its true essence. However, impact shouldn’t necessarily have a fixed definition, as its meaning can vary depending on geography, development stages, and community needs. For instance, what is considered impactful in a developed market might differ from the needs of emerging economies, where basic infrastructure and access to clean energy might take precedence. What is more important is that investors have a clear understanding of the specific impact outcomes they wish to achieve. With this clarity, they can build the right talent, strategies, and tools to make those outcomes a reality.

The journey toward impact investing is unlikely to be smooth, as it involves trial, learning, and adaptation. Balancing market return expectations with the dual goal of creating meaningful impact will take time and refinement. This challenge is not unique to Malaysia—globally, many impact investors face the same dilemma. A study by the PRI (Principles for Responsible Investment) highlighted that a significant barrier to impact investing in developed markets, such as Europe and the US, is the difficulty of balancing financial returns with impact goals. This leads to an important question: if return expectations are prioritised or set to match conventional market standards, can that investment truly be considered impact investing? How does it differ from traditional funds focused solely on returns? One possible solution lies in thoughtful portfolio structuring, with clear allocations for financial return-only investments, impact-first investments, and hybrid models. In fact, the rise of blended finance globally has shown that combining different sources of capital, including philanthropic funding and commercial investments, can help bridge this gap. However, this approach raises further questions: does such structuring dilute the core principles of impact investing, or can it coexist with them? Ultimately, this conversation highlights the need for clear sector recognition and understanding the impact creation process, which will help guide investors in achieving their intended social and environmental outcomes, alongside financial returns.

In Malaysia, additional challenges further complicate the development of the impact investing space. A key issue is the limited domestic investment pipeline, particularly for investable social enterprises and scalable mission-driven businesses. Coupled with a risk-averse mentality among many investors, this hampers the growth of the sector. The perceived higher risks, often associated with impact ventures, limits transformative investment opportunities. As a result, many impactful ventures struggle to secure the funding needed to scale, creating a cycle of limited investment opportunities and slow venture growth. Additionally, there is a talent shortage on both sides of the ecosystem. Investors with specialised expertise in impact investing and industry-specific knowledge are lacking, while impact ventures often face challenges in attracting skilled professionals to execute their missions, leaving founders burdened by the dual expectations of profit and impact.

Despite these challenges, this evolving landscape offers significant opportunities for growth and development. With the right tools and resources, investors and stakeholders can deepen their understanding, refine their strategies, and evolve toward more effective, sustainable impact investing practices. As global demand for impact-driven investments continues to rise, the potential for Malaysia to be a key player in this space is immense, especially with the increasing recognition of the importance of local context in driving impactful investments.

Note: The above observations exclude broader market factors, movements and trends that affect all investors. These insights are made assuming ceteris paribus, meaning all other factors remain constant.

Insights from philanthropic foundations

12

Malaysian corporate or philanthropic foundations, majority established for over 10 years

70%

receives funding via corporate allocation and/or donations

RM230 mil

annual funding or allocation received collectively

RM3 bil

worth of philanthropic funds deployed collectively since inception across various thematic areas

Approach to impact

Impact creation model

  • 51% provides direct/indirect service provision (including grant making)
  • 30% provides capacity building opportunities (majority via scholarships)
  • 12% drives advocacy and policy change

Delivery channel

  • 35% work with intermediaries or paid vendors
  • 25% are directly involved through in-house programs

Impact strategy

  • 40% align with parent/corporate or entity's missions or goals
  • 23% respond to emerge issues or crisis

Impact measurement

  • 50% measure impact using internally developed guidelines
  • 25% measure only what is required by stakeholders, without a formal framework

Use of impact data

  • 42% collect impact data for stakeholder accountability
  • 28% use data to refine strategies, interventions, or outcomes

State of impact investment

None

  • are currently involved in impact investing, though 30% express interest in doing so

Grant

  • is the top funding mechanism adopted, with 66% providing simple grants and 13% offering recoverable grants

Role of philanthropy in impact investing

  • 36% aim to build the capacity of intermediaries or innovators to become investment-ready
  • 18% recognise the catalytic role of philanthropic capital in nurturing new solutions or innovations
  • 13% view it as risk-free capital to attract impact investors or R&D funding to build investable cases

Top wishlist

  • Greater collaborative efforts and knowledge sharing at the ecosystem level.
  • Mobilise diverse sources of capital.
  • Access to resources and expertise to enhance impact measurement practices.
  • Learning opportunities on innovative funding mechanisms.
  • Drive development of enabling policy and regulatory frameworks.

Our observation

Philanthropy in Malaysia is well-established, with many corporations actively engaging in corporate social responsibility (CSR) and dedicating significant resources to social causes. These foundations have long played a key role in addressing community needs and driving social change through grants, donations and in-kind contributions. Compared to the investment community, philanthropic foundations in Malaysia have a deeper understanding of social impact. Their experience working with intermediaries and directly engaging with beneficiaries enables them to identify areas where their efforts can make a meaningful, tangible difference. However, challenges remain in measuring and tracking impact. With greater resources, foundations could significantly enhance their ability to demonstrate the real-world effects of their initiatives.

The concept of impact investing has yet to significantly influence the way philanthropy is practiced, largely due to limited financial expertise and resources within the philanthropic sector. Additionally, regulatory frameworks such as Section 44(6) of the Income Tax Act 1967 (ITA), which governs tax-exempt status, shape the operational landscape for foundations and may hinder the adoption of innovative funding mechanisms or the experimentation with new models.

To truly transform the philanthropic sector, there is a growing need for forward-thinking approaches, fresh talent, and adaptable work models. Impact investing, while not intended to replace traditional philanthropy, can serve as a valuable tool for foundations seeking to diversify their funding sources, reduce reliance on corporate donations and create more sustainable, resilient funding structures. This doesn’t mean foundations need to become impact investors themselves. Rather, they can explore impact investment models where applicable, especially when it aligns with their long-term objectives. For instance, recoverable grants could offer a more sustainable funding model by holding recipients accountable for efficient resource use while allowing foundations to recycle funds for future initiatives. Foundations can also develop more outcome-focused philanthropic funds that prioritise measurable results and strategic impact, moving beyond traditional grant-making.

Globally, many foundations and philanthropic organizations are embracing blended finance and impact-first investments to drive more sustainable and impactful social change. These shifts reflect a growing recognition that traditional grant-making alone is insufficient for addressing systemic issues. Many are experimenting with innovative funding models, such as impact bonds or social enterprises, that not only provide financial support but also focus on measuring success through tangible, measurable outcomes.

The Malaysian philanthropic sector stands at a pivotal moment, with an increasing need for greater innovation in how funds are deployed, managed and measured. By leveraging the tools and strategies of impact investing – such as clear outcome measurement, financial sustainability and improved resource utilisation- philanthropic foundations can strengthen their ability to generate meaningful and lasting change.

Image Source - Rustic Borneo Craft

A Practical Framework Through Case Studies

These case studies provide an insightful exploration of the impact investing landscape in Malaysia, offering a practical framework for those looking to launch or refine their own initiatives. Moving beyond theoretical discussions, we present real-world examples of organizations navigating the challenges and opportunities within this growing field. Each case study captures the ongoing journey of these organizations, highlighting the adaptations and efforts they are making in their pursuit of impact. Through these diverse narratives, we aim to equip you with both the knowledge and inspiration needed to create meaningful and sustainable impact, acknowledging that the path forward requires continuous learning, adaptation, and growth.

Avia Labuan Foundation - Impact by Design

Avia Labuan Foundation Group was established in 2023 as a single-family office based in Selangor. While its primary focus remains on preserving the family’s wealth through a diverse investment portfolio, Avia is intentionally structured to blend commercial success with a strong commitment to social impact. Central to this approach is their pledge to allocate one-sixth of their profits to philanthropic endeavours, embedding giving into its core structure. This commitment also profoundly influences their investment strategy and partnerships decisions.

Inspired by the founder’s humble beginnings and a strong belief in the transformative power of education, Avia prioritises initiatives that address educational and social welfare needs, particularly for underserved communities, using funds allocated specifically for philanthropic efforts. This commitment is exemplified when Avia exited one of its investments that generated a 5x return. Rather than taking any profit, they kept only the principal and donated all profits to a local university to fund a 0% interest student loan program. Recognising the importance of responsible deployment, Avia ensured that the university established robust governance and due diligence procedures for the program. The program’s success, marked by a high repayment rate and near-zero default rate, demonstrates the effectiveness of well-governed micro-loans in alleviating temporary financial hardship and promoting greater access to education.

The one-sixth mandate requires a careful balance between financial goals and a genuine desire to create positive social change. Avia integrates ESG and impact considerations into their commercial investment decisions whenever possible, prioritising opportunities that tangibly benefit communities when commercial prospects are similar. As a relatively new entity, Avia acknowledges that their journey is ongoing. While actively seeking to expand their network, they remain committed to exploring effective methods for assessing the broader social and environmental impacts of their investments.

Avia’s narrative demonstrates how a clearly defined commitment can shape investment decisions and create a firm foundation for impactful action. This case underscores the critical role of clearly defined structures with robust governance in ensuring that impact missions are consistently achieved. It also highlights the importance of establishing a clear mandate, charter and mission statement, ensuring that impact is embedded in every decision.

SEEd.Lab – One Size Doesn't Fit All

SEEd.Lab, initiated by PETRONAS in 2020 in collaboration with Tata Consulting Services (TCS), embodies a unique approach to corporate social impact. Moving beyond philanthropy, SEEd.Lab leverages core competencies and expertise of both PETRONAS and TCS to incubate social enterprises that address pressing social issues in Malaysia.

 To date, SEEd.Lab has successfully conducted three cohorts. The 12-to-18-month program upskills participants and matches them as co-founders to tackle challenges in areas such as education, food security, and climate change. This co-founder matching process, while challenging, aims to create diverse teams committed to a shared purpose. Participants, known as SEEd.lings, graduate with a social enterprise built during their time in the incubator. Teams receive monthly allowance and in-kind support, including mentorship and networking opportunities before pitching to a panel for a RM50,000 grant and opportunities to prototype and commercialise the potential solution.

As of January 2025, SEEd.Lab has nurtured thirteen (13) successful impact businesses and provided over approximately RM250,000 per venture in grants and allowance to support their growth. Despite the program’s success, commercialisation funding and support continue to be significant challenges for social enterprises. While some ventures have achieved cash-flow breakeven and are self-sustaining (e.g., Teman Malaysia and ENOKU), many still require external funding to scale further. The grant model has been essential in the early stages of these ventures but may not be sustainable for long-term growth, limiting their scalability. Moreover, external funders remain hesitant to invest in social enterprises, perceiving them as high-risk. Early-stage social enterprises are more likely to receive funding from philanthropic organisations rather than financial institutions or investors. SEEd.Lab’s experience reveals that funders often focus more on financial results, instead of the broader impact of social enterprises in fulfilling their mission and benefiting their communities.

SEEd.Lab’s journey illustrates both the challenges and opportunities of building a social enterprise ecosystem in Malaysia. It also raises a critical question: are traditional venture capital or private equity approaches, which prioritise return targets, effective for impact ventures whose business models and growth trajectories differ from those of traditional startups? Some founders prefer to avoid the pressure of return expectations, which can conflict with their mission-driven goals. This prompts a deeper reflection: how can social enterprises move beyond grant reliance while still receiving tailored ecosystem support? It raises the fundamental question of whether founders and investors need to co-create alternative funding approaches. Ultimately, the success of these ventures relies on collaborative efforts to design financing mechanisms aligned with their mission and long-term impact goals.

Bintang Capital - Resources, Roadblocks and Realities

Founded in 2018, Bintang Capital Partners (Bintang) set out to redefine Malaysia’s private investment landscape. As Southeast Asia’s first B Corp-certified private equity firm, Bintang sought to leverage capitalism as a force for good, driving large-scale systemic change through its investments. Bintang aspires to create 150 B Corp-certified portfolio companies by 2050. This ambitious target requires resilience and collaboration, given the nascence of impact investing in the region.

To affirm its commitment, Bintang aligned with global best practices, becoming signatories to the UN Principles for Responsible Investment (UN PRI) in 2021 and the Operating Principles for Impact Management (Impact Principles) in 2022.  Building on these foundations, Bintang pursued B Corp certification in 2023, adopting a structured framework to integrate impact across its operations and investment processes. Bintang was able to capitalise on global resources, dedicating substantial effort to identify frameworks that aligned with its unique model and putting them to test.

Despite initial scepticism, Bintang’s efforts bore fruit when two out of six portfolio companies in their maiden fund achieved B Corp certification in 2024, with more expected in 2025. It found that the newer generation of entrepreneurs are increasingly inclined to build impact-driven businesses, a trend supported by like-minded Limited Partners (LPs), including Penjana Kapital (now Jelawang Capital, a subsidiary of Khazanah Nasional), who supported Bintang’s vision from the outset. Today, Bintang has expanded its focus to gender lens investing and carbon transition, continuously refining its investment strategies. Another significant challenge Bintang faced was the limited talent in the ecosystem. Recognising the importance of building internal capacity, Bintang invested heavily in talent development to upskill its team. However, challenges remain in impact measurement, as Bintang navigates the complexities of balancing idealism with the realities of generating commercial returns.

In recognition of their efforts, Bintang was awarded the UN PRI Private Markets Special Prize – becoming the first firm in Asia to receive this accolade – as well as the UN Women’s Empowerment Principles Malaysia Innovative Finance Award, both in 2024. As global interest in impact-first funds grows amidst macroeconomic uncertainty and political instability in the West, a key question arises: can Asia become the next frontier for impact investing? To unlock this potential, it’s essential to mobilise strategic resources and address key barriers. By fostering knowledge-sharing, advocacy and collaboration, we can strengthen the impact investing ecosystem and enhance its appeal across the region.

A Special Grant Program – Capital Innovation at Work

This case study delves into a social enterprise grant program initiated during the COVID-19 pandemic to address the funding challenges faced by many civil society organizations (CSOs) and social enterprises (SEs). Launched in 2022 by an impact-based foundation in Malaysia, the program initially allocated RM5 million to fund eligible social enterprises. This allocation increased to RM10 million in 2023 and 2024, with more than 60 social enterprises benefiting from the program to date.

The program was designed not only to offer immediate financial support but also to bolster resilience of SE in addressing three major challenges: financial sustainability, operational efficiency, and capacity building. It offers grant support tailored to the specific needs of each SE, with financial and impact milestones monitored to guide SEs toward building viable business models. A key feature of the program is its innovative recoverable grant mechanism, introduced to shift SEs away from the traditional grant mentality while being mindful of the financial challenges posed by the pandemic. Rather than imposing immediate repayment expectations, the recoverable grant offers a flexible payback mechanism designed to align with the unique cash flow needs of each SE. If impact targets are exceeded, the payback rate is reduced, providing further incentives for high performance. This recoverable grant model is available only to accredited SEs, as guided by KUSKOP’s accreditation guidelines. This structure serves as an experimental ground to assess whether established SEs can take on financial discipline while scaling their operations. 

In 2022, the recoverable grant amount was capped at RM500,000 per SE, which increased to RM750,000 in 2024, reflecting the growing scale of support. Notably, 90% of the 2022 cohort demonstrated strong financial management and remained on track with their repayment schedules, even after exceeding their impact targets. This outcome validated the effectiveness of the payback mechanism, showcasing the SEs’ capacity to manage funds responsibly. Additionally, this model helps enhance the credentials of SEs, improving their investment readiness and increasing their chances of securing external funding. The capital repaid to the foundation is then redeployed to support future SEs, creating a continuous cycle of impact. 

While the program has been successful in many ways, impact measurement remains a significant challenge. Available framework has proven to be too complex for on-the-ground adoption by the SEs themselves. Simplifying the process to ensure that SEs can effectively track and report on their progress will be critical moving forward. 

The recoverable grant model, while common globally, is still relatively new and not widely adopted in Malaysia. The foundation’s approach highlights the importance of innovation in tailoring funding deployment strategies that are specifically suited to the needs of impact ventures. This open, flexible approach has enabled the foundation to connect with like-minded funders or capital providers, amplifying the collective effort to drive social change.

GDRN – Shared Vision, Shared Success

The GLC Demi Rakyat dan Negara (GDRN), a philanthropic coalition of Malaysia’s Government-Linked Companies (GLC) and Government-Linked Investment Companies (GLIC), showcases a strategic partnership model for effective disaster response and humanitarian aid. Formerly known as GLC and GLIC Disaster Response Network, it was initially established to coordinate collective aid to support communities affected by natural disasters and crises, such as the COVID-19 pandemic. This case study explores GDRN’s evolution, collaborative spirit and impact, highlighting valuable lessons that can be adopted by the impact investing community.

Initiated in 2013 under the Putrajaya Committee for GLC High Performance (PCG), with Khazanah Nasional Berhad as its Secretariat, GDRN initially focused on relief and reconstruction following major floods. From 2013 to 2016, the network played a role in various relief efforts, particularly in Kelantan, Pahang and Johor. Recognising the need for broader assistance, GDRN was reintroduced as GLC Demi Rakyat dan Negara, expanding its scope to include knowledge and well-being initiatives. By March 2022, GDRN’s efforts were structured around three core pillars: Jalinan Ilmu (knowledge), Jalinan Kemanusiaan (humanitarianism), and Jalinan Sejahtera (well-being).

The COVID-19 pandemic underscored the critical role of GDRN in crisis response. The network mobilised its partners to provide urgent support to the Ministry of Health, coordinating the delivery of essential medical supplies, personal protective equipment, and ventilators. Early contributions from GLCs, GLICs and private sector entities totalled RM40 million. This swift and coordinated response demonstrated GDRN’s capacity to act as a crucial conduit for channelling resources efficiently during a national health crisis. GDRN also played a pivotal role in addressing the Johor flood crisis triggered by the North-East Monsoon. Through its Jalinan Kemanusiaan pillar, GDRN provided over RM5 million in aid. Collaborating with the National Disaster Management Agency, local governments, and civil society organizations, GDRN members acted as first responders, delivering essential assistance to affected communities. By December 2021, collective contributions from 13 GLICs and GLCs reached RM54.4 million, further augmented by a RM25 million matching grant from the Ministry of Finance, bringing the total to RM79.4 million.

While not an impact investment itself, GDRN’s collaborative approach, multi-stakeholder engagement, and strategic alignment with national priorities provide a strong foundation for creating positive social and environmental impact. By adopting these lessons and exploring collaborative approaches such as blended finance models, the impact investing community can enhance the effectiveness and scalability of its interventions, driving meaningful change.

Our Call to Action

To unlock the full potential of impact investing in Malaysia, we must continue to build and strengthen the ecosystem, going beyond mobilising capital. This study calls on the following key actions:

Invest in Talent Development

Prioritise capacity building and leverage available resources to upskill your team in key areas such as impact measurement, financial structuring and governance. Whether you're an investor, social entrepreneur or foundation, empowering your team with these skills will help scale initiatives effectively, stay aligned with the latest trends and enhance the ability to deliver impactful results.

Discover New Funding Mechanisms

Be open to exploring and experimenting with innovative capital strategies and outcome-driven models, such as social impact bonds, convertible grants, pay-for-success models and even venture philanthropy. These flexible and adaptable mechanisms help align the expectations of both funders and impact ventures, ensuring that the shared impact goal drives decisions while unlocking new and diverse sources of capital.

Advocate for Enabling Policies

Make your voice heard and be part of a collective effort to drive change! Share what’s working and highlight areas for improvement by actively engaging with policymakers, such as advocating for tax incentives, better access to capital, and clearer impact measurement standards, to help shape a supportive ecosystem that fosters growth and innovation.

Image Source - Solar Installation for Indigenous Community Source - Saora Plus

While this study offers valuable insights into the current state of impact investing in Malaysia, it represents only a small part of the broader ecosystem. Much more needs to be explored and charted to fully understand and unlock the potential of impact investing in the region. Future areas for further exploration include:

High-net-worth individuals (HNWIs) and family offices

These investors have more flexibility in deploying capital and could play a key role in shaping the impact investing landscape. Understanding how they can be more involved is crucial for the growth of the ecosystem.

Engagement from international and regional investors

There's an opportunity to explore why more global and/or regional investors are not yet actively investing in Malaysia. Understanding these barriers could help unlock further investment potential.

Islamic finance

Though complex, Islamic finance offers a unique opportunity to attract capital through ethical investment structures. Exploring how these financial tools can support impact ventures would provide additional resources for the ecosystem.

These are some of the important areas that require deeper exploration to strengthen the ecosystem and drive more effective and sustainable impact investing in Malaysia. We also invite others who are keen to collaborate with us in charting out the impact investing ecosystem and creating a collective framework for meaningful change across the region.

Reach to out us and join the movement

This report was edited by Pamela Ng, Director at Hive & Partners, in collaboration with Malaysia Impact Alliance (MYImpact). The study is a collective effort to provide insights into the current landscape of impact investing in Malaysia, based on observations and engagements with key stakeholders as of 2024. While we’ve made every effort to ensure accuracy, please note that the findings reflect the trends and perspectives at the time of writing, which may evolve over time.

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Targeted Deployment of Capital

E.g.

  • Catalyse innovation or new ideas
  • Enable business growth or impact expansion
  • Enhance solution for scalability
  • Support market creation or development
  • Improve operational efficiency or impact delivery
Creation of Intended Impact

E.g.

  • Improved access to essential products/ services
  • Better quality of life for low-income or marginalized groups
  • Environmental sustainability through responsible solutions
  • Increased financial inclusion for the underserved
  • Social equity through inclusive business models and policies