Malaysian Companies Need To Bridge The Intention-Action Gap For Better Environmental Sustainability

According to Refinitiv’s Financing a Sustainable Future in Asia report, Malaysia’s largest companies are rank third lowest in the region overall for environmental sustainability out of eight markets studied with the average environment score of 57.82, slightly exceeding the regional average of 62.34 points. Companies in Hong Kong recorded the best overall performance in Asia with an average score of 70.06, followed by South Korea (64.57) and India (63.12).

Intention – Action Gap
A clear gap is seen between intention and action, with a greater portion of Malaysian companies having policies on emissions, waste management, and water efficiency, than those with actual targets for improvement. In Malaysia, the largest disparity is in resource and waste management, with 87 percent of Malaysian companies adopting waste reduction policies, but only 20 percent having specific waste reduction targets to back up their policies. According to the report, targets can make a significant impact on action over time and drive real change.

Great Strides in Supply Chain
The report also highlights that Malaysian companies have made considerable progress in building more ethical supply chains. The largest increase in companies with supply chain policies has been in Singapore, however, Singaporean companies lag the region in the development of environmentally conscious products, with only 40 percent developing environmentally friendly products and services, compared to 56 percent of companies in Asia.

Biodiversity Off the Menu
Biodiversity refers to biological diversity, and ultimately the health of the world’s plant and animal life and habitats. When looking at biodiversity impact, it is revealed that companies both in Asia and globally have been worryingly stagnant in this area, with just 24 percent of companies globally and 29 percent in Asia measuring this.

“With Asia set to lead global economic growth in the coming decade, the region’s companies and business leaders will play a prominent role in the sustainable development agenda. As many of the world’s most pressing environmental and social concerns, such as climate change and social inequality, reach critical junctures, it is important that companies take their responsibilities seriously. ESG data and transparency play an important role to drive and influence the changes required to sustain future economic and social growth,” Elena Philipova, Global Head of ESG at Refinitiv said.

“Achieving the Sustainable Development Goals is a collective effort that starts with the most influential members of society, including large companies, leading the way. It requires a deep collaboration between the public and private sectors, as well as mobilisation of significant finances to succeed. Daily, we see more financial institutions increasing due diligence and directing investment towards more responsible and sustainable companies and investments. As concerns in areas such as climate change grow, we expect this trend to accelerate.”

More information on Refinitiv’s ESG scores can be found here: https://www.refinitiv.com/content/dam/marketing/en_us/documents/methodology/esg-scores-methodology.pdf

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