Malaysia's Textile Waste Crisis: A Case Study of Climate-Related Risks and Sustainable Finance Strategies for a Circular Economy Transition

Malaysia’s textile industry contributes to national economic growth, but it also creates increasing concerns related to waste management. This case-study examines the textile waste problem in Malaysia by reviewing industry reports, government policies and available waste-related data. The findings show that the industry is still largely operating under a linear “take-make-dispose” model, where used clothing, production scraps and textile residues are often sent to landfills or released into the environment. Textile waste also contributes to water pollution and microplastic contamination, especially from synthetic fibres. Although Malaysia has introduced policy directions that support recycling, circular economy practices and cleaner production, there is still no strong legal requirement for clothing producers to take responsibility for collecting, reusing or recycling textile products after use. The case-study also finds that some large apparel firms have introduced sustainability initiatives, but many small and medium-sized textile businesses face limitations in finance, technology, waste tracking and reporting capacity. This case-study highlights the need for stronger waste regulation, better textile waste data, clearer product claims and greater support from regulators, financial institutions and industry players. The originality of this study lies in viewing textile waste not only as an environmental issue, but also as a climate and financial risk for Malaysia’s sustainable development.

Climate Change, ESG, Textile Industry, Waste Management

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