Rebecca PY A new ABB survey reveals that while most Malaysian industrial companies are investing in energy efficiency, many struggle to translate plans into consistent results. Organizational silos, skills shortages and implementation challenges are emerging as the main barriers to progress.
MALAYSIA, 17 MARCH 2026 – Energy efficiency is increasingly becoming a strategic priority for businesses, but many industrial organizations in Malaysia are finding it difficult to translate ambition into sustained outcomes, according to a new study by ABB.
The report, based on a global survey of 2,700 senior decision-makers across 15 countries and 15 industries and conducted in partnership with Sapio Research, highlights both strong momentum and significant execution challenges within Malaysia’s industrial sector.
According to the findings, 63 percent of Malaysian respondents have already invested in energy efficiency initiatives, while another 33 percent plan to do so within the next 12 months. However, despite this strong level of interest, many organizations are struggling to implement these initiatives effectively and at scale.
Energy expenses now represent an average of 25 percent of operating costs for companies in Malaysia, putting significant pressure on profit margins. Around 61 percent of respondents indicated that rising energy prices continue to threaten profitability, shifting the focus of executives from short-term cost reactions to long-term risk management.
Compared with global benchmarks, Malaysian businesses show similar energy cost burdens but demonstrate a stronger sense of urgency regarding profitability risks. Notably, Malaysia also stands out for its high level of digital readiness, with 84 percent of companies reporting that they are already using or prepared to deploy digital tools for energy management, significantly higher than the global average of 67 percent.
Despite this readiness, many organizations still struggle with practical implementation. Only 42 percent of Malaysian companies consistently apply total cost of ownership when making investment decisions, even though 85 percent agree that it should guide purchasing strategies.
Another challenge identified in the report is fragmented accountability. Energy efficiency initiatives are often distributed across multiple departments such as executive leadership, operations, sustainability, maintenance and finance, without a single function clearly responsible for delivering results.
Industry leaders say the nature of barriers to energy efficiency has evolved. While cost was previously the main obstacle, the report indicates that global concerns about cost have declined since 2022. Today, the larger challenges involve organizational silos, shortages of specialist expertise and limited access to actionable data.
In Malaysia specifically, the most commonly cited barriers include high implementation costs (54 percent), concerns about operational downtime or disruptions (44 percent) and a lack of specialized resources (36 percent).
The report also warns of a growing phenomenon described as post-renewables complacency. Among Malaysian organizations that have transitioned to renewable energy sources, representing 43 percent of respondents, 37 percent reported placing less emphasis on energy efficiency.
While renewable energy can reduce carbon emissions, it does not necessarily lower the overall volume of energy consumed. As a result, companies may miss opportunities to improve efficiency, strengthen operational resilience and better manage long-term energy costs.
When asked about their motivations for investing in energy efficiency, Malaysian respondents highlighted three primary drivers: reducing energy costs, cited by 63 percent of respondents; regulatory compliance, at 53 percent; and improving resilience and competitiveness, at 49 percent.
The report concludes that the next phase of industrial energy transformation will depend less on awareness and more on the ability of organizations to execute effectively. As companies move beyond initial commitments, coordinated strategies, digital intelligence and long-term operational frameworks will be critical to delivering meaningful energy performance improvements.