PETALING JAYA: Corporates, listed or otherwise, must not ignore the growing movement of sustainability, warned Bursa Malaysia Bhd’s executive chairman, Tan Sri Abdul Wahid Omar (pix).
Should they ignore this issue, he surmised, they will not get institutional investors on board or loans from banks and have difficulties securing underwriting, as well as trouble in attracting young talent who are more conscious of sustainability issues.
“You will also have difficulties selling your product if you’re not sustainable. It’s not a case of nice to have but a matter of business survival,” Wahid said today during the virtual Sustainable Finance Week in conjunction with Malaysia’s participation at Expo 2020 in Dubai, hosted by the Securities Commission Malaysia (SC).
He noted that listed companies also have to contend with the Malaysian Code on Corporate Governance issued by the SC in April 2021 which mandated boards and companies to have due regard for sustainability issues in their strategy and business operations.
Employees Provident Fund (EPF) chief investment officer Rohaya Mohammad Yusof concurred, and she observed that environment, social, governance (ESG) has become extremely important for two factors: risk mitigation and value enhancement.
“Hence a lot of investors are looking at integrating ESG into their investment-making decision. Obviously, if you look at risk, we don’t want to end up with stranded assets,” she said.
Rohaya said the pension fund plans to launch a sector-specific sustainability policy framework as guidance for its future investments before the end of this year. The EPF launched its first sustainability policy framework last year.
“The most important thing, everybody should realise ESG is mainstream and it is an important consideration for investment.”
Citing ExxonMobil as an example, she said activist investor Engine No 1 took control of the board as it did not see any progress in pivoting or shifting away from fossil fuels. The chief investment officer pointed out that companies should realise the gravity of these issues and shareholders are taking action, as activism is on the rise.
Maybank Kim Eng CEO Ami Moris said Malaysia’s challenge, like that of other developing countries, is to decarbonise.
In this regard, Petroliam Nasional Bhd has pledged to align its net zero goals with the country’s – to be carbon neutral by 2050, which sets an example to other oil and gas companies in the country.
“Furthermore, Malaysia is an open economy, hence there is an expectation for us to match the pace of transition with international norms or we risk being locked out of export markets and supply chains as the country’s trading partners –China, the US and the European Union – are also accelerating towards net zero.”
In his keynote interview, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz pointed out that Malaysia is among the 10 countries in the world which have fully aligned its national budget to United Nations’ sustainable development goals.
In Budget 2022, he said, the Finance Ministry has mapped out the government’s initiatives on sustainable development goals (SDGs), allowing Malaysia to better match the national landscape of financing programmes with SDG-related projects. Overall, he added, Budget 2022 includes transition towards low carbon practices, environment and diversity, community empowerment and Malaysia plans to issue its first government sustainability sukuk in ringgit.
