by AZALEA AZUAR/pic by TMR

THE government has enough money to maintain its current programmes to support the people, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said today. 

He said programmes like fuel subsidies will be maintained even with the price hikes in oil prices and projected inflation is still within 2.3% to 3.3%.

However, he said the government is looking at targeted subsidies. 

“The government has informed that the total subsidy this year will reach RM70 billion where the oil subsidy alone will reach RM30 billion. 

“We have made estimates based on brand oil prices in the world,” he told reporters after the launch of Khazanah Nasional Bhd’s Sustainable Framework and Targets.

The minister said the top 20% (T20) group currently enjoy the bulk of government fuel subsidies. 

For every RM1 of fuel subsidy, 53 sen goes to the T20 group, while only 15 sen is utilised by the bottom 40% group.

“That is, if our subsidy is RM30 billion, RM15 billion is allocated to the upper class. Where the allocation is better if we can give to those who really need it. 

“That’s a longer term but for now the government will continue to provide for subsidies. We are still able to help our people to get subsidies to continue at this time,” he said.

Moreover, Malaysia’s revenue also depends on commodity prices and the government is planning to ask companies such as Petroliam Nasional Bhd for more dividends.

Khazanah’s framework and medium-term target is a guide for the company and its investors to deliver sustainable value by integrating environmental, social and governance (ESG) considerations into their core business. 

It focuses on issues that mainly impact the organisation and its portfolio from a business materiality point of view as well as being holistic under the three main pillars of ESG.

Tengku Zafrul said the government’s broad-based strategies and measures that will support Malaysia’s longer-term ESG-based aspirations. 

“Firstly, strengthening sustainability-related financing and investments, which complements the United Nations Sustainable Development Goals (SDGs) by coordinating initiatives and programmes that incorporate ESG elements. 

“As part of our overall effort to embrace the sustainability principle in public spending, the Ministry of Finance (MoF) has tagged all programmes and projects under development expenditure to the SDGs in our annual budgets,” he said.

In collaboration with the Ministry of Environment and Water and Bursa Malaysia, the minister will also implement the Voluntary Carbon Market before transitioning to the Domestic Emissions Trading Scheme. 

On the other hand, Bank Negara Malaysia and the Securities Commission issued the Task Force on climate-related Financial Disclosures Application Guide for Malaysian Financial Institutions in March this year in order to monitor and drive action towards meaningful change at the regulatory level.

“The MoF’s second main strategy is to empower small and medium enterprises in the area of ESG. 

“Given the importance of the sector to the economy, developing the capacity of our SMEs is a key building block to achieving our ESG aspirations and our net zero goal by 2050,” Tengku Zafrul added.

MoF also aims to institutionalise ESG measures and they will be focusing on ESG-focusing projects and programmes next year.

About 150 chairmen, CEOs and senior management of government-linked Investment companies and selected government-linked companies under Khazanah attended the launch.

Khazanah MD Datuk Amirul Feisal Wan Zahir felt that they need to adopt an all-of-Khazanah approach which means covering all aspects of how they behave as a not only a responsible investor but also a sustainable organisation and a good corporate citizen.

“This means that sustainability is embedded into everything that we do — from how we manage our investments, to how we operate as a firm, to how we support and contribute to the societal development objectives of the nation.

“Khazanah’s aspiration is to play a leading role in shaping an equitable and responsible transition towards a sustainable future for Malaysia,” he said. 

As Malaysia’s sovereign wealth fund, the group must ensure that its actions support a more inclusive economy and they will be taking a collaborative approach with investors to shift towards a more sustainable business model.

“To ensure that we hold true to our aspirations, we have developed a set of Guiding Principles to anchor our decision-making in our sustainability journey. 

“We strive to bring balance in adhering to these principles, allowing flexibility to adapt our sustainability approach based on the different asset classes and sectors that we invest in,” Amirul mentioned.

Khazanah has identified “Sustainable Investing” and “Enterprise Sustainability” as two key action points to help achieve its sustainability targets in the framework.

Sustainable Investing enables the company to consider ESG principles in its decision-making process while it will embed sustainability into its day-to-day operations through better management of its usage, material consumption patterns, as well as travel practices under Enterprise Sustainability.

Also under its environmental pillar, Khazanah will also aim to achieve zero emissions by 2050 and will be working towards carbon-neutral operations by 2023.