Sustainability Trends in Malaysia
Where are we on Sustainability?
Most Malaysian companies have and are performing some level of sustainability activity, whether through meeting compliance requirements, volunteering for relief efforts, donating money, or others.
Bursa Malaysia rolled out a CSR framework for Public Listed Companies
Introduction of the Ministry of Energy, Green Technology & Water
Green Technology Policy introduced to harness green technology development in Malaysia
Dato' Sri Najib Tun Razak announced that Malaysia was committed to reducing its carbon emissions by up to 40% intensity by 2020
Where are we on Sustainability?
- Introduction of Health, Safety & Environment policies, labour laws, etc.
- Malaysia's first SRI fund, the RM39 million Maybank Ethical Trust Fund is launched
- Malaysia purchased illegal timber from Indonesia and was subsequently exposed by Indonesian media – forced Malaysian companies to begin sourcing from more responsible suppliers
- The Natural Resources and Environment Ministry instructed all new marina or recreational projects planned to submit a full Environment Impact Assessment (EIA) report
- Malaysia begins to introduce tax incentives for sustainability type activities
- Association of Certified Chartered Accountants (ACCA) introduces CSR Reporting awards
- Putrajaya Committee for Government-Linked Companies (GLCs) Transformation launches the "Silver Book", focused on social responsibility
- Bursa Malaysia introduces CSR framework as a guide for Malaysian public-listed companies to report CSR activities
- Bursa Malaysia announces that all public-listed companies are required to disclose CSR activities in their annual financial reports
- Institute of Corporate Responsibility Malaysia (ICRM) and The Star Biz – ICRM awards launched
- First stand-alone sustainability report by a Malaysian company produced
- Government announces Green Technology Policy 2009 which aims to harness green technology development in the country
- Government announces a RM 100 million CSR fund
- Creation of federal-level ministry dedicated to Green Technology
- Government announces a RM1.5 billion Green Technology Fund for the promotion of research and development towards environmental sustainability.
- Malaysia announces commitment to reduce carbon emissions by offering 'credible cuts' of up to 40% intensity by 2020
- Sustainability is one of the three goals highlighted in the New Economic Model
Key milestones in Malaysia's sustainability journey1
Based on a PricewaterhouseCoopers analysis of the top 10 companies by market capitalisation of selected Asian countries, most countries report their sustainability performance as part of their annual report. Standalone sustainability reports are not part of the norm, although China has a higher percentage of companies choosing to report their performance via a standalone report
Sustainability Reporting by Country (2008/2009)
Study finding on Sustainability reporting trends of the top 10 companies by market capitalisation of selected Asian economies2
Bursa Malaysia found that some of the leading public-listed companies in the country fared well in sustainability, and were integrating it in their day-to-day operations and decision-making3.
However, the majority of the companies performed poorly, with most indicating a poor awareness of sustainability concepts, as well as sustainability issues that were relevant to their business.
Amongst some key findings of the report were:
- On average, companies performed far below international best practice standards
- Nearly two-thirds of public-listed companies were average, below average or poor
- Multinational corporations performed the best
- Public-listed companies that performed well were typically in sustainability higher-risk or "sin" industries, such as tobacco and gaming
- The construction sector exhibited little or no engagement at all in sustainability
Bursa Malaysia also found that companies performed the best in workplace initiatives, and poor in initiatives for the environment.
Much has changed in Malaysia since the 2007 report, and sustainability awareness, performance and disclosure has increased.
With the Malaysian government recently placing higher emphasis on the environment, Malaysian companies will be encouraged to increase focus and disclosure on environmental initiatives.