As we step into the first day of what is expected to be a challenging year, especially for emerging economies - it feels like a good moment to pause and reflect.

One key insight from my research keeps coming back to me, particularly when we talk about the future of our economy and sustainability in Malaysia.

Sustainable investing often called ESG investing (Environmental, Social, and Governance) is no longer a “nice-to-have” globally. It’s becoming part of mainstream investing. Yet, despite Malaysia’s strong economic standing, retail investor participation remains surprisingly low, even compared to other emerging markets.

So what’s holding us back?

One of the clearest findings from my research is this: many retail investors simply don’t know enough about sustainable investments.

Some aren’t aware these options exist. Others feel they don’t have enough information to make confident decisions. When investment choices feel complicated or unfamiliar, most people naturally stick to what they already know and sustainable investing often gets left out of their financial journey.

Our perception plays a huge role in how we invest.

• Financial knowledge matters. Investors with stronger financial literacy are more likely to understand the long-term value of sustainable investing. On the other hand, when financial literacy is limited, sustainability can feel abstract or even risky.
• Mindset plays a role. Those who value ethics, responsibility and long-term impact tend to be more open to ESG investments.
• Short-term vs long-term thinking. Many investors still priorities quick returns, making sustainability seem less attractive.
• Risk perception. Because sustainable investing is still relatively new to some, it is often viewed as risky. Investors with higher risk tolerance are more willing to explore it.

This highlights one clear need: better education on both risks and rewards.

Interestingly, Malaysian retail investors are not indifferent at all. Many care deeply about where their money goes. Common concerns include:

These concerns show that values matter but translating them into investment action remains a challenge.

Several barriers continue to stand in the way:

Despite all this, there are strong reasons to be optimistic.

My research, “Malaysian Investor’s Financial Proficiency Towards Risk Tolerance and Sustainable Investment Decisions” (L. Rahsiad, 2022), shows that while awareness and interest are slowly growing, participation remains low due to gaps in knowledge, risk perception and accessibility.

As Malaysia moves forward under the vision of Ekonomi MADANI; an economy built on sustainability, shared prosperity and long-term resilience - our investment behavior matters. Empowering retail investors with education, supportive policies, and smart technology is not just a financial goal; it’s a national one.

💚 And the truth is: