AEON Co (Malaysia) Bhd is stepping up its ESG efforts, promoting sustainable retail through active engagement with its customers and partners, said analysts who are heartened by the sustainability progress, revising AEON’s overall ESG score to 3.5 stars from 3.0 stars. (ESG stands for Environmental Stewardship, Social Responsibility and Governance Excellence)
Kenanga Investment Bank Bhd noted that AEON’s sustainability initiatives can be an example among retailers in the country.
First and foremost, the retail mall group has established Malaysia’s largest indoor vertical farm at AEON Alpha Angle in Wangsa Maju, in collaboration with Agroz Group. The EduFarm-in-City, spanning 5,238 sq ft, grows pesticide-free, nutrient-rich vegetables such as kale, butterhead and lettuce with an estimated 1.3 tonnes production per month that is supplied to AEON stores in the Klang Valley.
In addition to the vertical farm, AEON has resorted to managing waste with composting. At AEON Alpha Angle, the waste management centre collects organic waste from retailers within the mall and converts it into compost. Since June 2022, it has processed 18,184kg of organic waste, producing 3,112kg of compost – about 1kg of compost for every 6kg of waste. The compost is then distributed to third-party suppliers to enhance soil health and support local farming.
Also, AEON is on track to install solar photovoltaic (PV) panels in AEON shopping malls nationwide, with a total capacity of approximately 77,000 kWp under a 25-year agreement with Tenaga Nasional Bhd.
The kilowatts peak, or kWp, rating of a solar panel represents the panel’s maximum capacity, or peak power output, under optimum sunlight conditions.
Currently, 11 out of 28 AEON malls have PV panels installed, with four already fully commissioned, namely AEON Taman Maluri, AEON Alpha Angle, AEON Cheras Selatan and AEON Ipoh Station 18. AEON Alpha Angle houses 1,513 kWp of PV panels on its rooftop and ground-level open-air car park.
Other notable initiatives include AEON’s collaboration with Green EV Charge, TNBX and Gentari in installing 40 electric vehicle (EV) charging points (20 DC and 20 AC) at 16 of its malls with further expansion ahead, and its recycling programmes in partnership with recyclers and consumers.
On the recycling front, the group has improved its recycling rate to 11% in 2023, up from 10% the year before. The group continues to intensify its recycling efforts for different material categories including PET bottles, high-density polyethylene plastic bottles (usually used for storing detergent and shampoo) and used textiles.
AEON has successfully reduced its emission intensity by 51% in 2023 compared to the base year 2019 as it begins adopting the use of renewable energy (RE) via the purchase of green electricity and the installation of solar PV panels.
Analysts maintain their UNDERPERFORM call and the target price of RM1.21 for AEON, noting that AEON’s share price has run ahead of its fundamentals. Meanwhile, sales turnover forecasts for 2024 and 2025 remain within the range of RM4.12 billion to RM4.22 billion
As at 3:21pm on Oct 9, AEON’s stock traded at RM1.45, also its opening price. (Stock updates from Bursa Malaysia)
