While Maybank Investment Bank (Maybank IB) witnessed steady progress in TSH’s “E” initiatives, they have overall rated TSH’s ESG 2.0 score to be below average at 40 (out of 100).
This is due to a general lack of disclosures and medium-to-long term commitments relative to larger peers.
Maybank IB maintains SELL with an unchanged TP of MYR1.00 on 11x FY24 PER, -1SD of 5Y mean.
E – Took stock of internal GHG inventory
TSH has developed a comprehensive GHG inventory that includes Scope 1 and Scope 2 data for FY19 to FY22. In efforts to minimise and avoid any undue wastage, TSH practices the 4R’s principle; Reduce, Reuse, Recycle, and Recover, wherever possible.
Moving forward, other initiatives are being considered such as implementation of solar at other business units, diesel reduction plans and methane capture via biogas facility as part of its decarbonisation efforts.
However, relative to large cap peers, TSH still lags in terms of GHG and Energy intensity disclosures, and commitments on long term reduction targets. S – Socially responsible TSH recognizes the rights of indigenous and local communities which include securing their Free, Prior and Informed Consent for any new development.
It also undertakes many CSR programmes for the local communities. It upholds labour standards and respecting employees’ rights.
The group has zero tolerance for child labour and forced labour, and practices equal employment opportunity and diversity. However, TSH still lags in terms of female representation at the Board level.
G – Making progress, with room for improvement
In FY22, TSH made good progress in its ESG initiatives. As a start, it officially established a Sustainability Steering Committee (SSC) tasked with effectively managing ESG-related commitments, risks and material topics.
The SSC is chaired by the Group MD, and is assisted by the GM – ESG which is a new position. Nonetheless, TSH appears to have some room for improvement in relation to other “G” practises such as Audit Committee comprising solely of Independent Directors.
