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Local And Global ESG News | October 2024 Roundup

October was another busy month for many businesses and institutions moving toward a more sustainable future through ESG reporting.

Malaysia is advancing its sustainability, technology, and data management initiatives to strengthen its global competitiveness and sustainable growth. The Investment, Trade and Industry Ministry (MITI) released its inaugural sustainability report, marking Malaysia’s commitment to transparent ESG practices. In support, MITI aligns with the Madani Economic Framework for sustainable economic growth.

Here is a roundup of last month's other important stories.

Capitaland Malaysia Trust's Sustainability Linked Loans

Capitaland Malaysia Trust has successfully secured RM752 million in sustainability-linked loans, demonstrating its commitment to integrating environmental, social, and governance (ESG) factors into its financing strategies. This funding aims to enhance sustainability initiatives across its portfolio, aligning with global best practices. The trust's ability to obtain these loans reflects growing investor confidence in its sustainability efforts, marking a significant step toward responsible financing in the Malaysian property sector.

These loans are instrumental for Capitaland Malaysia Trust as they set specific sustainability targets, such as reducing energy consumption and carbon emissions in its operations. By achieving these targets, the trust improves its sustainability performance and potentially lowers borrowing costs. This initiative is part of a broader trend among Malaysian firms to embrace ESG principles, which are increasingly becoming essential for long-term financial success and resilience in a competitive market.

US-Keen Climate Partnership with Malaysia

The United States is actively seeking to enhance its climate partnership with Malaysia, particularly in the sustainable aviation fuels sector. This initiative aims to support Malaysia's transition toward greener energy solutions, highlighting the potential for collaboration between the two nations in addressing climate change. The partnership focuses on developing innovative technologies and policies that promote sustainability within the aviation sector.

In addition to sustainable aviation fuels, discussions include broader environmental strategies that align with both countries' commitments to reducing greenhouse gas emissions. This collaboration supports Malaysia's climate goals and strengthens bilateral relations, positioning both nations as leaders in climate action and sustainable development.

Malaysia's ESG Bonds Market

Malaysia's market for ESG bonds currently comprises only 0.3% of the total outstanding global ESG bonds year-to-date, signalling a significant opportunity for growth. This low percentage highlights the potential for Malaysian companies to enhance their commitment to sustainability through green financing. As global demand for ESG investments rises, Malaysian issuers are encouraged to capitalise on this trend by developing more green and sustainable financial products.

In response to this situation, industry experts emphasise the need for clearer guidelines and incentives to facilitate the issuance of ESG bonds in Malaysia. By fostering a more robust ESG bond market, Malaysia can attract international investors and strengthen its position in the global sustainable finance landscape.

Hong Leong Bank's Sustainable Finance Framework

Hong Leong Bank has unveiled a sustainable finance framework that commits to investing USD 4.5 billion to support sustainability initiatives. This framework aims to provide financing solutions that align with the bank's environmental goals, encouraging businesses to adopt greener practices. The initiative reflects the bank's dedication to contributing to Malaysia's broader sustainability agenda and addressing climate change challenges.

The framework will enable Hong Leong Bank to facilitate funding for various projects, including renewable energy, energy efficiency, and sustainable infrastructure. By aligning its financing strategies with sustainable development goals, the bank positions itself as a leader in promoting sustainable finance within the region, encouraging responsible investments that benefit both the environment and the economy.

Norway's Wealth Fund Advocates Flexible ESG Reporting

Norway's Wealth Fund has called for more flexible ESG reporting practices in Malaysia, arguing that a one-size-fits-all approach may not adequately address companies' and investors' diverse needs. The fund's advocacy aims to encourage the Malaysian market to adopt reporting standards that are adaptable and relevant to different sectors, fostering a more inclusive and effective sustainability landscape.

This initiative reflects a growing recognition of the importance of tailored ESG reporting that aligns with specific business models and operational contexts. By promoting flexibility in reporting, the wealth fund seeks to enhance transparency and accountability, ultimately driving more sustainable business practices across Malaysia's economy.

Budget 2025 Highlights for Economic Revitalisation

Malaysia's Budget 2025 emphasises economic revitalisation through targeted reforms to stimulate growth and attract investments. Key measures include incentives for small and medium-sized enterprises (SMEs), a focus on digital transformation, and sustainability initiatives to bolster the green economy. The government aims to support sectors critical for economic recovery, such as technology and renewable energy, while ensuring fiscal responsibility.

Additionally, the budget outlines plans for improving public infrastructure and enhancing education and training programs to build a skilled workforce. This approach aims to enhance productivity and innovation, ultimately contributing to a more resilient economy. The government also emphasises collaboration with various stakeholders to ensure the successful implementation of these initiatives.

The budget aims to create a conducive environment for entrepreneurs by streamlining regulatory processes and supporting research and development. Moreover, it emphasises the importance of sustainable practices, urging businesses to adopt green technologies and eco-friendly operations. This dual focus on innovation and sustainability positions Malaysia as an attractive hub for entrepreneurial ventures.

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AirAsia Working Toward Reduced Carbon Emissions

AirAsia has introduced Combo Units, advanced ground equipment designed to reduce carbon emissions by 20,000 tonnes annually at Kuala Lumpur International Airport. These units replace traditional auxiliary power units, cutting emissions by up to 90% and reducing air and noise pollution.

The initiative aligns with Malaysia's Aviation Decarbonisation Blueprint, which aims for net-zero emissions by 2050. AirAsia also plans to implement a carbon fee on air travel by January 2025 to support further decarbonisation efforts.

MIDA Progressing with Green Investment Strategy

At IGEM 2024 in Kuala Lumpur, the Malaysian Investment Development Authority (MIDA) announced progress toward its goal of securing RM2.5 billion in green investments, targeting sustainability initiatives. The event featured seven investment leads, with partnerships supporting projects across the green ecosystem—such as renewable energy, green financing, and battery storage. Highlighting key projects, MIDA noted significant commitments, including RM1.4 billion from Chery Corporate Malaysia for energy-efficient vehicles and RM200 million from Asiabina Solar for solar power expansion.

Co-organised by Malaysia’s Ministry of Natural Resources and the Malaysian Green Technology and Climate Change Corporation, IGEM 2024 attracted significant international participation, with an anticipated business impact of RM4.8 billion. The event supports Malaysia’s ambitious goals under its Green Investment Strategy, aiming for 70% renewable energy by 2050, alongside initiatives like the New Industrial Master Plan and the National Renewable Energy Roadmap. Mida’s long-term green investment target is RM300 billion by 2030, underscoring its dedication to a low-carbon future.

Findings From The ESG Disclosure Assessment Report

Recent developments in Malaysia's ESG landscape highlight significant progress in sustainable practices across various sectors. The ESG Disclosure Assessment Report establishes a baseline for reporting standards, promoting organisational transparency and accountability.

Techem secured a top ranking in the 2024 ESG risk rating, showcasing its commitment to sustainability. Meanwhile, Standard Chartered Saadiq partnered with Sunway to enhance green financing efforts, reflecting the increasing integration of environmental considerations in financial services.

Additionally, RHB Bank improved its ESG rating, bolstered by its sustainability roadmap, while KAB advanced supply chain decarbonisation through collaborations with Bursa CSI and Alliance Bank.

In the maritime industry, navigating ESG compliance remains a critical focus as Malaysia strives to enhance its environmental governance. As the country moves towards incorporating carbon pricing strategies, these initiatives collectively aim to foster a robust green economy and meet global sustainability targets.

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KAB Advances Supply Chain Decarbonisation through Key Collaborations

KAB (Kejuruteraan Asastera Berhad) is progressing its decarbonisation efforts in the supply chain by collaborating with Bursa Malaysia, CSI Alliance, and Alliance Bank. These partnerships aim to facilitate a low-carbon supply chain by providing support and resources for sustainable practices among small and medium-sized enterprises (SMEs).

Through strategic alliances, KAB seeks to reduce carbon emissions, promote sustainable procurement, and create a greener supply chain operations roadmap. This initiative highlights the role of public-private collaboration in achieving ESG goals and fostering a low-carbon economy.

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Minister Nik Nazmi Highlights Malaysia's Climate Change Vulnerability

At the Youth Climate Adaptation Forum in Kuala Lumpur, Malaysia's Natural Resources and Environmental Sustainability Minister Nik Nazmi highlighted Malaysia's vulnerability to climate impacts despite contributing just 0.8% of global greenhouse gas emissions. He reiterated the country’s commitment to advancing climate adaptation and resilience, aligning with the UAE's global climate framework, especially as Malaysia prepares to lead ASEAN in 2024.

The forum, held alongside the IGEM conference, centred on empowering young people to engage in sustainable development topics like biodiversity and climate justice. Minister Nazmi underscored the importance of youth participation, supported by a new youth cluster under the Climate Change Consultation Panel. This approach follows a 2020 UNDP-Unicef study showing that 92% of Malaysian youth view climate change as an urgent issue, and many are willing to take action, making them critical partners in resilience-building efforts.

GenScript Biotech’s MSCI ESG Rating Upgrade

GenScript Biotech, a biotech leader, recently received an MSCI ESG rating upgrade to "A," reflecting its strengthened environmental and governance practices. The company’s initiatives align with global sustainability standards, enhancing its attractiveness to ESG-focused investors.

Petronas and TNB’s Hydrogen Collaboration

Petronas and TNB have agreed to collaborate on hydrogen development, marking a significant step in Malaysia’s energy transition. This partnership will focus on building hydrogen infrastructure and exploring green hydrogen production.

Both companies aim to leverage this sustainable energy source as part of Malaysia’s long-term goal of reducing carbon emissions and diversifying its energy resources.

Malaysia’s National Industrial Strategy for Sustainable Growth

Malaysia’s new National Industrial Strategy emphasises sustainable growth, targeting advancements in digital industries, green technology, and high-value manufacturing. The strategy aims to boost economic resilience, attract foreign investments, and enhance productivity through innovation and industry-wide improvements.

This strategy aims to attract investment and enhance Malaysia’s global competitiveness by emphasising innovation, skill development, and sustainable practices. It aligns with Malaysia’s vision of fostering a high-value, future-ready economy. It seeks to drive critical sectors, including technology and green manufacturing.

With a focus on meeting global sustainability standards, the strategy aligns with Malaysia’s goal to position itself as a leader in sustainable industrialisation, supporting both economic and environmental objectives.

Malaysia's Palm Oil Industry and Biodiversity Conservation

Malaysia’s palm oil sector is integrating biodiversity preservation as a central part of its ESG strategy. The industry recognises global concerns over deforestation and is adopting sustainable land-use practices and promoting wildlife conservation within plantations.

This approach aims to align with international ESG standards, helping maintain Malaysia’s environmental image while sustaining its palm oil exports.

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National AI Office Ready To Launch

Malaysia's MyDIGITAL will launch its National Artificial Intelligence Office in November 2024 to guide ethical AI development and promote the country as a leader in generative AI. Announced by Prime Minister Anwar Ibrahim at a Google-hosted event, this office will coordinate national AI strategies, aiming to produce actionable outcomes within the next year, including a comprehensive AI Technology Action Plan.

The government also launched the AI Talent Roadmap (2024–2030) and the Malaysia-AI Consortium (MAIC) to drive AI advancements in critical sectors and encourage collaboration with industry leaders like Google.

A regulatory framework will focus on ethical AI practices, supporting digital transformation in areas such as education, where AI tools are already enhancing learning for millions. As Malaysia takes on the ASEAN chairmanship, it plans to champion regional digital policies encouraging innovation and cross-border cooperation.

UTM’s ESG-Driven Campus Transformation

Universiti Teknologi Malaysia (UTM) emphasised ESG principles in its campus operations by showcasing these efforts at the WTUC 2024 conference.

The university’s initiatives include reducing its carbon footprint, improving waste management, and enhancing green spaces on campus. UTM’s approach highlights how educational institutions can lead in ESG-focused community models.

Eight Malaysian Startups Win at World Summit Awards

Malaysia was well represented at the World Summit Awards Malaysia National Finals, with eight innovative Malaysian startups gaining recognition as category winners. The startups showcased their solutions across health, environment, and smart cities. These startups represent Malaysia’s growing entrepreneurial spirit in leveraging technology for social impact, positioning them for potential success on an international stage.

Google The Benchmark for Water And Energy Efficiency

Malaysia plans to adopt Google’s water and energy efficiency practices as benchmarks for its data centres, aiming to improve sustainability and reduce resource usage. This approach is part of the country’s guidelines to minimise environmental impacts while enhancing operational efficiency.

A core element is Google’s water stewardship model, which includes initiatives like lake restoration in Selangor, aimed at replenishing more water than consumed. Additionally, Malaysia’s Corporate Renewable Energy Support Scheme (CRESS) will facilitate direct access to renewable energy, further supporting the decarbonisation of digital infrastructure.

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Global News

2024 ESG Global Leaders Conference

The 2024 ESG Global Leaders Conference recently concluded in Shanghai, bringing together 270 leaders from various sectors to discuss sustainable development and integrating ESG principles into business strategies. The conference provided a platform for exchanging best practices and collaborative initiatives to tackle global sustainability challenges. Leaders emphasised the need for collective action and commitment to achieve the United Nations' Sustainable Development Goals (SDGs).

Attendees shared insights on innovative approaches to sustainability, including advancements in technology, investment strategies, and policy frameworks that support ESG integration. The conference underscored the growing recognition of sustainability as a critical economic growth and resilience driver. It encouraged participants to implement actionable plans within their organisations to contribute to a more sustainable future.

Zijin Mining’s Environmental, Social, and Governance Framework

Zijin Mining has announced a comprehensive Environmental, Social, and Governance (ESG) framework to enhance its sustainability practices. The framework outlines the company's commitment to responsible mining practices, minimising environmental impact, promoting community engagement, and ensuring robust governance structures. Zijin emphasises the importance of transparency in its operations and aims to align with international ESG standards.

The company's initiatives include reducing carbon emissions, managing waste effectively, and contributing to local community development through various social programs. By implementing this framework, Zijin aims to enhance its reputation as a responsible player in the mining sector while addressing stakeholder concerns regarding sustainability.

UAE’s Leadership in Green Finance

The UAE leads globally in green finance, with initiatives fostering investments in renewable energy, low-carbon projects, and sustainable development. The UAE’s commitment to green finance includes regulatory frameworks that drive sustainability, making it a pioneer in the Middle East.

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TPISoftware Gains Recognition for Sustainability Initiatives

TPISoftware has received significant recognition for its sustainability initiatives, reflecting its commitment to ESG principles across operations. By emphasising green innovation, waste reduction, and transparent ESG disclosures, the company sets an example for the tech industry. TPISoftware’s efforts align with growing demands from clients and stakeholders for more sustainable practices.

This recognition showcases the company's dedication to responsible growth and environmental stewardship, positioning it favourably within the ESG landscape.

Real Estate ESG Data Hub by Deka Immobilien and BuildingMinds

Deka Immobilien and BuildingMinds have collaborated to create a centralised ESG data hub aimed at helping real estate managers achieve carbon reduction goals. This platform enables precise tracking and reporting of environmental impact data, critical for meeting new regulations and optimising resource use across properties.

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Upcoming Events

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Introduction to ESG: From Concepts to Practical Application

12 November 2024 | AVANTÉ Hotel, Kuala Lumpur

26 November 2024 | CIDB Convention Centre, Kuching, Sarawak

2 December 2024 | Iconic Hotel, Penang

10 December 2024 | Sabah Int. Convention Centre, Kota Kinabalu, Sabah

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Powering Progress: Renewable Energy ESG Conference 2024

13th – 14th November 2024

Double Tree by Hilton, Kuala Lumpur

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Mastering ESG:Building Strategic Roadmaps for Sustainability

13 November 2024 | AVANTÉ Hotel, Kuala Lumpur

27 November 2024 | CIDB Convention Centre, Kuching, Sarawak

4 December 2024 | Iconic Hotel, Penang

11 December 2024 | Sabah Int. Convention Centre, Kota Kinabalu, Sabah

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Sustainable Action Conference 2.0

Thursday, Novemeber 21 2024 7.30 am to late

Sunway Resort Hotel, Kuala Lumpur

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Assessing Malaysia’s Opportunities & Risks: Insights for 2024 and Beyond

Thursday, November 21 2024 at 16:00

Online Webinar

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UNGCMYB Sustainability Celebration Night 2024

29 Nov 2024 at 7:00 pm

Grand Hyatt, Kuala Lumpur

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