Learnings and Insights from the National Climate Governance Summit 2024
MyGreenlight attended the National Climate Governance Summit 2024 in Kuala Lumpur on Thursday, 12th September 2024.
Former Minister of the Prime Minister's Department (economics, economy planning unit), YBhg Dato Sri Mustapha Mohammad, opened the day's proceedings with a welcome speech. He addressed recent climate disasters and highlighted the importance of leadership to work towards preventing further disasters. He also stated that Malaysia is lagging behind regarding the United Nations' Sustainable Development Goals (SDGs), and there is a need for greater public engagement to revive ecosystems and protect endangered species.
Keynote Speech 1: Planetary Boundaries at Tipping Points
The first Keynote Speaker, Professor Anders Levermann, Head of the research department Complexity Science at Potsdam Institute for Climate Impact Research, took to the stage next. He started by explaining the physics of climate change and how we are getting closer to the tipping point of planetary boundaries. Professor Levermann said that Earth's rising temperature is driving the destabilisation of Antarctica and that extreme immediate action is needed to address these issues.
He noted that even if we stop burning fossil fuels and stick to the Paris Agreement target, we will still witness rising temperatures and the death of coral reefs. The increase in temperatures leads to more rain, bringing the risk of flooding. The Gulf Stream also feels the impact of climate change; if it stagnates, the risk of extreme tropical storms increases.
First Panel: Capital markets supporting ecosystem services
We attended a panel discussion moderated by Sharath Martin, (Senior Policy & Insights Consultant, ACCA, Asia Pacific; Trustee, WWF Malaysia) with panellists Professor Dr Ong Kian Ming (Pro Vice-Chancellor for External Engagement, Taylor's University) and Dr Dzaeman Dzulkifli, Executive Director, Tropical Rainforest Conservation & Research Centre (TRCRC).
The panel discussed the Dasgupta Review and how nature and our planet must be central to economic policies and motivations. They delved into how capital markets can bolster ecosystems, the hurdles of sustainable investing, and the pivotal role of corporate commitment to ESG goals. They emphasised that factories and industrial parks must measure the scope one impacts on the environment and, if possible, don’t silo services and products as this increases the effects on the surroundings.
Unfortunately, the Earth's natural assets are not considered to have monetary value. Therefore, they are often carelessly damaged in the pursuit of financial gain. It is incumbent on manufacturers and suppliers to consider the value of nature, water, air pollution, and forests as part of their economic plans.
Working towards protecting our planet will be possible with greater public and governmental engagement and more transparency about the disbursement of funds and grants to preserve the environment. Projects involving carbon credits must be linked to more visible impacts, with industries creating rewards or value adds to their standards for companies complying with SDGs. They finished the discussion by pondering whether the various Governmental departments and universities could introduce Chief Sustainability Officers to monitor the ESG within them.
Keynote Speech 2: sustainable investing, greening and growing our economy at once
Liew Ching Tong, Deputy Minister of Investment, Trade and Industry, gave the second Keynote Speech. He addressed the government's commitment to developing policies for a more robust, sustainable economy. He stated that an issue that arises is that if we view the climate and environment as a cost, then we will keep debating who should bear the cost.
He gave examples of how the government transformed the economy in the past by focusing on missions such as improving road networks through toll roads. He said that it was a case of demand management vs. supply management, and it was vital that city planning incentivises inner-city living to improve everyone's lives.
Sustainable investment touches many aspects of the economy and people's everyday lives. Food security is one such issue, and it is crucial to address it through biotech options, such as finding alternative food sources like insects or lab-grown proteins. It is essential that such companies get the price right and that the State Governments look at the incentives they have to preserve lands and protect the environment.
Panel Discussion 2: Aspiring to be nature-positive
At the second discussion, the panel comprised Sathis Venkitasamy, Renuka Indirarajah, Shahril Azuar Jimin, and Gretchen Govoni. They talked about how various companies and institutions were moving toward a more nature-positive way of doing business. They looked at Maybank's progress and commitments and how they are preparing to meet the requirements of the UN's Taskforce for Nature-related Financial Disclosures (TNFD) in line with Bursa Malaysia's requirement for FYE 2025.
They then discussed PETRONAS Chemicals and how they are working to reduce their impact on climate change. They feel this is easier than focusing on nature because renewable energy and reducing greenhouse gases can significantly impact slowing or reversing climate change. Nature is much more complex because of the multitude of variables.
Other bodies, such as the UNFCCC, UNCBD, World Business Council for Sustainable Development, and WEF's plans and guides, were also discussed. They posited that focusing on climate goals would also help nature goals and that regulatory environmental compliance can be another tool for supporting nature.
The panel said that internal goals and engagement within companies to improve the environment were essential. Setting short-term goals would be more effective, as most people do not grasp long-term goals, such as 2050. Companies need to tap into corporate social responsibility (CSR) programmes to understand better the impact their business can have on their communities.
They looked at how Heineken takes care of its water supply as it is essential for the longevity of its business. They have developed ideas around water circularity and more efficient use of water. They are balancing their usage with the conservation of this valuable resource. They did this by working to educate the community and investing in protecting and cleaning the rivers they use for their water consumption. They have created initiatives such as building community gardens and harvesting rainwater to help the people in the areas near their factories and breed a better sense of responsibility for everyone to take care of the environment and protect resources such as water.
Another example of big companies working toward a more sustainable future is Maybank's decision to tie sustainability commitments to company KPIs. Tying the bank's employee benefits to ESG performance can encourage and inspire its workforce to be more mindful of the business's environmental, social, and governance aspects.
The panel discussed how external engagement and finding other companies on the same journey can help everyone figure out how to solve sustainability issues. Looking at the building blocks for sustainability employed at Heineken, they see that understanding issues and seeking solutions combined with top-level leadership and ambition for improved sustainability and governance can have a massive impact.
Companies must start by identifying stakeholders, leveraging strategic partnerships, measuring and evaluating periodically, and transparent reporting to improve their ESG standing. Using the media to share best practices and inspire others can be very effective.
The panel felt that companies like Maybank and Heineken, leading by example, powerfully remind us of the collective impact of such commitments.
Keynote Speech 3: Anticipating Indirect Physical and Transition Risk
The third keynote speaker at the conference was Lt Kol Haki Mohd Syukri bin Haki Madnor, Chief of the Malaysia Civil Defence Force's Secretariat and Policy Planning and Coordination Division.
He discussed climate risks and the need for preparedness to protect the country against climate, geological and biological hazards.
Keynote Speech 4: Existential Tipping Points in Antarctica, Arctic and Greenland
The last keynote speech of the day was delivered by Dr Sharifah Mazlina, a national polar explorer and Chairman of the NGO All Women Empowerment To Accelerate (AWETA). She outlined how we are creeping ever closer to the tipping point regarding the melting ice in Antarctica, the Arctic, and Greenland. She outlined how we must work now to stop this from happening before more natural disasters, such as flooding and storms.
Masterclass: A primer on introducing carbon pricing in Malaysia
MyGreenlight attended a Masterclass by Taisei Matsuki, the World Bank's Senior Climate Change Specialist. With welcoming remarks from Tan Mei Ling, Senior Country Operations Officer at the World Bank Malaysia, the session aimed to address the critical need for carbon pricing in the country's fossil fuel-dependent economy, highlighting its potential to stimulate economic growth while reducing greenhouse gas (GHG) emissions.
The session focused on providing a general understanding of carbon pricing mechanisms and their potential role in Malaysia's efforts to mitigate climate change. The session emphasised the urgent need for climate action and sustainability efforts. The key points covered were:
The rationale for carbon pricing: Malaysia’s GDP growth has historically been tied to fossil fuel consumption, contributing to rising CO2 emissions. Carbon pricing was presented as a straightforward method to internalise the cost of these emissions and incentivise businesses to adopt greener practices. There are three main types of carbon pricing:
- Carbon Tax: A fixed price on carbon emissions.
- Emissions Trading System (ETS): A system with an emission cap, allowing businesses to trade carbon credits.
- Carbon Crediting: Credits are given for mitigation efforts in sectors not covered by tax or ETS.
Advantages of Carbon Pricing: Carbon pricing can drive innovation, help meet emission targets, generate revenue, and reduce costs. However, policies must be aligned, as contradictory measures, like fuel subsidies, can undermine the effectiveness of carbon pricing.
Carbon Tax and Cap-and-Trade:
- Carbon tax provides price certainty and is easier to administer, but lacks flexibility as it doesn’t reward companies that perform better than required.
- Cap-and-trade (ETS) provides a more flexible system with the potential for greater emissions reductions by trading allowances, incentivising better environmental performance. However, it requires new regulatory frameworks and infrastructure.
Challenges and Considerations for Malaysia: Introducing carbon pricing in Malaysia will require careful consideration of the local context, including:
- Sectoral Scope: Which industries and GHG emissions are to be regulated.
- Social Impacts: Carbon pricing may increase the cost of goods and services, affecting different regions and income groups differently. Some industries may grow while others shrink, impacting the labour market.
- Revenue Use: Strategies such as rebates, tax cuts, or increased spending on climate initiatives must ensure that carbon revenue is used effectively.
Global Context: Currently, 75 carbon pricing mechanisms are either active or being developed globally. Examples include the European Union, which accounts for 45% of the world’s carbon pricing initiatives, with much of the revenue going toward climate investments. Vietnam is also launching an ETS in 2026.
Carbon Pricing in Malaysia: Malaysia is exploring options for a carbon tax and an emissions trading scheme. The Voluntary Carbon Market (VCM) is an example of existing initiatives. With the implementation of carbon pricing, understanding and strengthening capacities across industries and regulatory bodies will be crucial.
Carbon pricing allows Malaysia to balance economic growth with environmental responsibility. However, successful implementation will require comprehensive planning, public engagement, and careful management of social and economic impacts.
MyGreenlight learned a lot at this summit, and we hope that many other attendees found some interesting information and are more driven to help protect Malaysia and the world from the impacts of climate change and poor environmental management.
If you wish to improve your ESG reporting, contact us today to learn how our MyGreenlight software can help you gather, analyse, and present your ESG report.
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