In the broadest sense, sustainability refers to the ability to maintain or support a process continuously over time. This aspect underlines the corporations of today who consume a monumental amount of resources to maintain daily operations.
The conscience of mankind can never run away from responsibility towards its environment and towards one another. Every action we take has an impact towards our surroundings and all of us are the stakeholders, whether the voiced or the voiceless towards the longevity of the Earth as well as promoting justice, fairness and equality.
No longer will customers and shareholders support products or services that serve only their own desires. Materials for products need to be ethically sourced, assembled by a labour workforce free from persecution, and ideally, do little harm to the environment.
Standards have risen dramatically, and companies can no longer be content in making economic decisions which impact only their bottom line. But the incorporation of good Environmental, Social And Governance (ESG) in companies goes beyond simply pleasing investors and making good public relations or worse yet, profitability focussed.
Tune Protect Group Berhad (Tune Protect), however, stands apart from the rest with its new sustainability tagline, “In Tune for a Better Tomorrow,” which is an apt one, considering that companies need to be in tune with the masses should they desire to remain competitive in this highly connected, evolving landscape.
Tune Protect’s motivation behind this tagline is the need to raise awareness of the significance of managing business in an environmentally sustainable manner and to encourage social change.
Robust ESG programmes can open access to large pools of capital, build stronger corporate brands and promote sustainable long-term growth that benefits companies and investors.
Companies that recognise the importance of adapting to changing socioeconomic conditions are better able to identify strategic opportunities and meet competitive challenges. But sustainability is no simple matter to achieve.
“As sustainability or ESG issues enter mainstream, companies must understand their ESG-related exposures and impacts across their operations and supply chain. These factors will become increasingly critical to maintain a social license to operate, deliver products to markets and consumers and access capital to support growth and expansion. Given the strong regulatory push and investor demand for ESG considerations, companies must start developing their own strategies to remain competitive in a fast-changing business environment,” said Tan Sri Abdul Wahid Omar, Chairman of Bursa Malaysia.
PwC in a December 2021 research found that 94% of the top 50 Malaysian public listed companies have ESG strategies in place.
KPMG stated in Sustainability Reporting 2022 that N100 sustainability reporting rates continued to trend upwards in Asia Pacific. The N100 is composed of the top 100 companies in a particular country that include sustainability information in annual financial reports.
Japan and Singapore led the charge with 100%, with Malaysia following closely behind at 99%. Our regional peers, Thailand recorded a reporting rate of 97%, while the Philippines and Vietnam were both at 87%.
Undoubtedly, sustainability practices are becoming the norm and corporations are increasingly flexing their sustainability muscles to better match the contemporary zeitgeist.
Leading By Example
To start off, Tune Protect has expressed its commitment to phase out coal in both its underwriting and investment portfolio by 2030, in addition to other ESG-sensitive industries including tobacco and weapons manufacturers.
It is making good progress beyond its Zero Coal commitment. Part of the group’s strategy is to exit large commercial underwriting and to focus instead on retail and SME segments. This has led to significant reductions in the group’s exposure to high emissions industries such as oil and gas and also aviation.
With regards to the group’s investment profile, 10.5% are sustainable investments in 2022. April 2023 marked the second year of Tune Protect publishing the integrated annual report which communicates in a concise manner how Tune Protect’s strategy, governance, performance and prospects leads to value creation for its stakeholders. In the same report Tune Protect has expanded on its disclosures aligned to the globally recognised Taskforce on Climate-related Financial Disclosures (TCFD). TCFD will be mandatory for Malaysian listed companies with financial year end on or after 31 December 2025.
To further encourage the transition towards a low-carbon economy and support ownership of electric vehicles, Tune Protect is currently running an ongoing campaign to provide free personal accident coverage for drivers and riders.
All customers purchasing motor insurance for electric vehicles receive rider coverage and unlimited towing services. Through this campaign, Tune Protect provides greater incentives for customers to switch to electrical vehicles at their convenience.
Prominent Milestones Along The Way
Since December 2021, Tune Protect has been a constituent of the FTSE4Good Bursa Malaysia Index. The organisation is currently the only insurer on the index and has improved its score from 3.3 to 3.6 for 2022.
Launched in Dec 2014, the index was aimed to support investors in making ESG investments in Malaysian listed companies as well as increase the profile and exposure of companies with leading ESG practices. In essence, the index supports the transition to a lower carbon and more sustainable economy.
Further on, Tune Protect’s sustainability journey was also recognised by the ESG Award 2022 as the Gold recipient of the Most Improved Performance Over 3 Years (for Market Cap Less than RM300 Million).
Tune Protect was also recognised for their efforts towards upholding transparency in their corporate reporting practices. They received the Best Annual Report Award (small cap) from the Investor Relations Magazine in the annual IR Magazine Southeast Asia Forum and Awards for their 2021 Integrated Annual Report.
To top it off, the group has for the third consecutive year been recognised by the Minority Shareholders Watch Group at the MSWG-ASEAN Corporate Governance Awards 2021, receiving the Industry Excellence Award for CG Disclosure. Tune Protect also came out 17th on the list of Top 100 Companies for the CG disclosure 2021.
These recognitions are but icing on the cake for corporations that pursue a more sustainable business model. Beyond it, corporations possess the capacity and responsibility to make monumental changes to environment, social and governance. Hence their actions should ideally reflect humanity as a whole.
