Lenders and suppliers are the other important drivers for sustainability

by NURUL SUHAIDI / pic TMR FILE 

THE global marketplace has now placed the sustainability agenda as a key component for the business ecosystem to address environmental issues such as climate change through initiating nature-based solutions.

Therefore, both the government and private sector organisations are gearing up their action promote and advance their sustainability-related ambitions.

According to the recent report released by the United Nations Global Compact Network Malaysia and Brunei (UNGCMYB) titled “Malaysia Businesses Sustainability Pulse Report 2022”, 50% of the organisations surveyed believed that government and customers are the key drivers toward corporate sustainability effort.

On the other hand, 25% of respondents indicated that lenders and suppliers are important drivers of sustainability.

The report is a six-month multi-collaborative effort between Bursa Malaysia Bhd, Malaysia External Trade Development Corp and Malaysia Digital Economy Corp, supported by Axiata Group Bhd, HSBC Amanah Malaysia Bhd and Sarawak Energy.

The report was aimed at unveiling the key drivers for corporate sustainability, companies’ readiness on environmental, social and governance (ESG) adoption, leadership aspect as well as the measurement of the success adoption.

The survey involves 261 respondents from corporates, and small and medium enterprises (SMEs) across various sectors such as consultant, energy, education, real estate and more.

It is observed that among Malaysian businesses, many stated the importance of “environmental aspect” takes precedence over “economic or financial” benefits.

However, when it comes to sustainability, deep dive of the results shows that corporates place a heavier emphasis on “environmental” and “social” aspects, whereas SMEs place “economic or financial” benefits as their primary focus and “social” benefits as secondary.

In term of readiness, 45% of the respondent is still considering dedicating resources towards being sustainable trade ready.

UNGCMYB ED Faroze Nadar said the report is to help the private sector to build a better understanding of the landscape and drivers in sustainability practices and strategies as they have a pivotal role in improving the landscape.

“Through adopting sustainability, they are also able to build their own competitiveness by meeting stakeholders’ expectations,” he said.

Despite the growing trend and emphasis on sustainability among local stakeholders, an alarming 45% of Malaysian companies did not allocate a budget for their sustainability initiatives with 33% of Malaysian companies claiming a lack of sustainable financing plans.

Tata Consultancy Services Malaysia country head Jeevan Rajoo noted that Asia overall is still on a slow trajectory to meet its sustainability targets, and there is still plenty of work to be done by all stakeholders in the community.

In addition, nearly half (47%) of the Malaysian private sector said the Sustainable Development Goals (SDGs) adoption is worrying and they indicate no commitments, while 34% of the enterprises said SDGs are irrelevant to their industry.

This outcome could be due to the business community being overly focused on ESG-related approaches and seeing a disconnect with the broader SDGs primary agenda. 

Sarawak Energy group CEO Datuk Sharbini Suhaili added that as a corporate, it is fully committed to and is working towards embedding more sustainable practices in its business and operation. 

“We are benchmarking ourselves against the best in our industry to enable us to move closer towards our vision,” Sharbini said.

Meanwhile, HSBC Amanah CEO Raja Amir Shah Raja Azwa said in line with the increase push for companies to adopt sustainable practices, HSBC Amanah will remain supportive with the initiative to better understand the sustainability landscape in Malaysia and help finance the transition.

Commenting on the report, Axiata joint acting group CEO and group CFO Vivek Sood said the collection of findings will aid gap analysis and identify areas of opportunities and challenges for cohesive and meaningful action by the private sector.