Goodwill Anagha

Recognition of ESG Importance and SRI Guidelines in Malaysia: In Malaysia, the recognition of ESG importance and the introduction of Sustainable and Responsible Investment (SRI) guidelines by the Securities Commission (SC) Malaysia have played a crucial role in promoting responsible investing and integrating ESG considerations into the Malaysian capital market. The Corporate Sustainability Initiative (CSI) Platform: One notable initiative in Malaysia is the establishment of the Corporate Sustainability Initiative platform. Launched by Bursa Malaysia in 2015, the CSI platform aims to encourage listed companies to adopt sustainable business practices and improve their ESG performance. It provides companies with a framework to disclose their sustainability efforts and achievements, fostering transparency and accountability. Technology-driven ESG Reporting and Analysis in Malaysia: Additionally, Malaysia has embraced the use of technology to enhance ESG reporting and analysis. The introduction of the Integrated Environmental, Social, and Governance (iESG) scoring system by Bursa Malaysia allows investors to assess the ESG performance of listed companies. The iESG framework incorporates multiple dimensions of ESG, including environmental, social, and governance factors, to provide a comprehensive evaluation of a company’s sustainability practices. Collaboration and Stakeholder Involvement in Driving the ESG Agenda: The collaboration between Bursa Malaysia and various stakeholders, including regulators, industry players, and investors, has been instrumental in driving the ESG agenda in Malaysia. By establishing guidelines and platforms like the CSI and iESG, Malaysia is actively promoting sustainable business practices and encouraging companies to prioritize ESG considerations. Future Outlook: Evolving ESG Standards and Integration of Technology: As businesses in Malaysia and around the world navigate the challenges of the future, ESG standards and frameworks, including initiatives like the CSI platform and iESG, will continue to evolve. The integration of technology and data analytics will further enhance the effectiveness of ESG reporting and analysis, enabling companies to make more informed decisions and investors to assess ESG performance more accurately. Malaysia’s Journey in ESG Integration: Overall, Malaysia’s journey in ESG has seen the implementation of innovative platforms like the CSI and the adoption of technology-driven approaches such as the iESG scoring system. These initiatives contribute to the growth of sustainable business practices in Malaysia and position the country as a leader in ESG integration.    

Introduction: The National Industry Environment, Social, and Governance (ESG) Framework is a comprehensive framework aimed at preparing Malaysia’s manufacturing sector to embrace ESG principles and tap into the US$12-trillion global market focused on ESG opportunities (CEO Morning Brief, 2023). This article explores the key pillars of the framework, its implications for Government-Linked Companies (GLCs) and Public Listed Companies (PLCs), and the initiatives implemented by the Malaysian government to promote ESG practices. The National Industry ESG Framework: The National Industry ESG Framework comprises four pillars: standards, financing, capacity building, and market mechanism. These pillars are complemented by 17 strategies, 50 deliverables, and six key enablers. The framework provides invaluable guidance and drives a ‘Just Transition’ towards ESG-compliance in the manufacturing sector, with a particular focus on Micro, Small, and Medium Enterprises (MSMEs). It is a key enabler for the Push for Net Zero mission, one of the four missions of the New Industrial Master Plan 2030 (NIMP 2030). Pillar 1: Standards Pillar: Establishing ESG Guidelines and Best Practices The standards pillar of the framework aims to establish a set of guidelines and best practices for ESG compliance in the manufacturing sector. These standards will serve as a foundation for companies to ensure their operations align with ESG principles (CEO Morning Brief, 2023). Pillar 2: Financing Pillar: Providing Financial Support for ESG Transition The financing pillar aims to provide financial support to companies that are transitioning towards ESG compliance. This support will facilitate the adoption of sustainable practices and help companies overcome financial barriers associated with the transition (CEO Morning Brief, 2023). Pillar 3: Capacity Building Pillar: Enhancing ESG Skills and Knowledge The capacity building pillar focuses on providing training and development programs to companies, enabling them to adopt ESG practices effectively. By enhancing skills and knowledge, this pillar aims to empower companies to implement sustainable practices across their operations (CEO Morning Brief, 2023). Pillar 4: Market Mechanism Pillar: Creating a Market for ESG-Compliant Products and Services The market mechanism pillar aims to create a market for ESG-compliant products and services. By promoting the demand for sustainable offerings, this pillar incentivizes companies to adopt ESG practices and align their products and services with market preferences (CEO Morning Brief, 2023). Implications for GLCs and PLCs: The i-ESG Framework is expected to have significant implications for Government-Linked Companies (GLCs) and Public Listed Companies (PLCs). GLCs, being government-owned, are expected to lead by example in adopting ESG practices. The framework will help GLCs identify areas for improvement and enhance their ESG practices (CEO Morning Brief, 2023). On the other hand, PLCs will be required to disclose their ESG practices in their annual reports, enabling investors to make informed decisions based on their ESG performance (CEO Morning Brief, 2023). Government Initiatives The Malaysian government has launched several initiatives to support ESG practices in the country. One of these initiatives is Bursa Malaysia’s Centralised Sustainability Intelligence (CSI) platform. Developed in collaboration with the London Stock Exchange Group, this platform serves as a repository for sustainability disclosures by listed companies and their supply chains. It reinforces ESG practices and facilitates the swift adoption of supply chain carbon emissions (Bursa Malaysia Berhad, 2021). The New Industrial Master Plan 2030 (NIMP 2030) is an industrial policy formulated by the Malaysian government to transform the manufacturing and manufacturing-related services sector. NIMP 2030 aims to achieve economic complexity, high-value job opportunities, domestic linkages, cluster development, inclusivity, and enhanced ESG practices (Ministry of International Trade and Industry, 2021). It takes a mission-based approach, fostering collaboration between the government and the private sector to provide strategic direction (New Industrial Master Plan, 2023). Conclusion The National Industry Environment, Social, and Governance (ESG) Framework is instrumental in guiding Malaysian companies towards adopting ESG practices and capitalizing on the vast opportunities presented by the US$12-trillion global market focused on ESG. Its pillars, strategies, and enablers provide invaluable guidance for the manufacturing sector, with a particular focus on Micro, Small and Medium Enterprises (MSMEs). Additionally, initiatives like Bursa Malaysia’s Centralised Sustainability Intelligence (CSI) platform reinforce ESG practices and disclosure among listed companies and their supply chains (Bursa Malaysia Berhad, 2021). With the support of Minister of Investment, Trade & Industry Datuk Seri Tengku Zafrul Abdul Aziz, who recognizes the i-ESG framework as a key enabler for the Push for Net Zero mission, Malaysia is poised to unlock global market opportunities worth US$12 trillion (Malay Mail Online, 2023). Minister Tengku Zafrul emphasizes the potential of the framework to drive sustainable growth and enhance Malaysia’s position in the global market (Malay Mail Online, 2023). The implementation of the National Industry ESG Framework and the New Industrial Master Plan 2030 (NIMP 2030) reflects Malaysia’s commitment to empowering and encouraging environmental, social, and governance (ESG) and sustainability goals within the small and medium enterprise (SME) sector (Ministry of International Trade and Industry, 2021). By capitalizing on emerging global trends and fostering collaboration between the government and the private sector, NIMP 2030 aims to transform the manufacturing sector and create a more inclusive and sustainable economy (New Industrial Master Plan, 2023). In conclusion, the National Industry Environment, Social, and Governance (ESG) Framework, along with initiatives such as Bursa Malaysia’s Centralised Sustainability Intelligence (CSI) platform, play a crucial role in guiding Malaysian companies towards adopting ESG practices and capitalizing on the vast opportunities presented by the US$12-trillion global market focused on ESG. With the support of Minister Tengku Zafrul and the implementation of the New Industrial Master Plan 2030 (NIMP 2030), Malaysia is poised to achieve sustainable growth and enhance its position in the global market.   References CEO Morning Brief. (2023). Industry Environmental, Social, and Governance (iESG) Framework Aims To Speed Up Transition Towards Sustainable Practices. Retrieved from https://www.ceomorningbrief.com/industry-environmental-social-and-governance-iesg-framework-aims-to-speed-up-transition-towards-sustainable-practices/ Chartered Secretaries Malaysia (MAICSA). (2023). National Industry Environment, Social and Governance (ESG) Framework. Retrieved from https://www.maicsa.org.my/resources/technical-research/technical-announcements/2023/231004-miti-national-industry-environmental-social-and-governance-esg-framework Bursa Malaysia Berhad. (2021). Bursa Malaysia Launches Centralised Sustainability Intelligence (CSI) Platform. Retrieved from https://www.bursamalaysia.com/about_bursa/media_centre/bursa-malaysia-launches-centralised-sustainability-intelligence-csi-platform Ministry of International Trade and Industry. (2021). New Industrial Master Plan 2030 (NIMP 2030). Retrieved from https://www.miti.gov.my/miti/resources/NIMP2030.pdf New Industrial Master Plan. (2023). …

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Introduction: Environmental, social, and governance (ESG) factors are increasingly important for the success and sustainability of businesses in the modern world. Stakeholders want to know how companies are managing their ESG impact and performance, and they expect clear and consistent reporting of ESG information. In this article, we will explore how a centralised system of ESG reporting can benefit companies and their stakeholders. We will also look at how IT consulting companies can support the adoption of a centralised system, using the example of the Corporate Sustainability Initiative (CSI) platform by Bursa Malaysia. What is the CSI platform? The CSI platform is a digital solution that enables companies to report their ESG information in a standardised and reliable way. The platform was launched by Bursa Malaysia in collaboration with the London Stock Exchange Group (LSEG) in March 2023, with the aim of building a quality and sustainable capital market and becoming a leading corporate governance and sustainability hub. The platform provides a framework for ESG reporting that aligns with international standards and best practices, such as the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and the Task Force on Climate-related Financial Disclosures (TCFD). The platform also allows companies to benchmark their ESG performance against their peers and industry leaders, as well as to access insights and analytics on ESG trends and opportunities. How does a centralised system of ESG reporting benefit companies and their stakeholders? A centralised system of ESG reporting, such as the CSI platform, offers several advantages for companies and their stakeholders, such as: Enhanced Transparency and Accountability: By reporting their ESG information through the CSI platform, companies can demonstrate their environmental and social impact, governance practices, and sustainability efforts in a consistent and reliable way. This transparency enables investors, customers, employees, and other stakeholders to make informed decisions and hold companies accountable for their actions. Facilitates Benchmarking and Performance Comparison: The CSI platform allows companies to compare their ESG performance with their peers and industry leaders, using a standardised framework for ESG reporting. This helps companies identify their strengths and weaknesses, as well as areas for improvement and innovation. Attracts Responsible Investment: By using the CSI platform to report their ESG information, companies can show their commitment to ESG practices and attract responsible investors who value sustainable and ethical businesses. The platform also provides investors with accurate and comprehensive information, giving them confidence in assessing a company’s sustainability and long-term viability. Supports Risk Management: The CSI platform helps companies identify and manage potential ESG risks more effectively. By reporting their ESG information through the platform, companies can evaluate their environmental and social impact, governance practices, and sustainability efforts more systematically. This enables them to implement risk mitigation strategies and avoid negative consequences. Drives Innovation and Efficiency: The CSI platform encourages companies to evaluate their ESG impact more comprehensively, often leading to the discovery of areas for improvement and opportunities for innovation. The platform also facilitates efficient data collection, structuring, and reporting, saving time and resources. How can IT consulting companies support the adoption of a centralised system of ESG reporting?IT consulting companies can play a vital role in supporting the adoption of a centralised system of ESG reporting by offering various services and solutions, such as: Integrating software solutions with the CSI platform: IT consulting companies can provide software solutions that integrate with the CSI platform, ensuring efficient data collection, structuring, and reporting. For example, they can offer data management systems that automate data extraction, validation, transformation, and loading from various sources into the CSI platform. Providing education and training on data sources, data structuring, and the effective use of the CSI platform: IT consulting companies can provide education and training on how to source reliable data for ESG reporting, how to structure data according to the CSI framework, and how to use the CSI platform effectively. For example, they can offer workshops or webinars on data quality assurance, data mapping, data analysis, data visualisation, etc. Offering collaboration and partnership opportunities: IT consulting companies can offer collaboration and partnership opportunities with other stakeholders in the ESG ecosystem, such as regulators, industry associations, NGOs, etc. For example, they can facilitate knowledge sharing or joint projects on ESG topics or issues. Conclusion: A centralised system of ESG reporting is essential for the success and sustainability of businesses in today’s world. By adopting a centralised system such as the CSI platform by Bursa Malaysia, companies can enhance their transparency and accountability on ESG matters; facilitate benchmarking and performance comparison; attract responsible investment; support risk management; and drive innovation and efficiency. IT consulting companies can support this process by offering software solutions that integrate with the CSI platform; providing education and training on data sources, data structuring, and the effective use of the CSI platform; and offering collaboration and partnership opportunities with other stakeholders in the ESG ecosystem. By doing so, IT consulting companies can add value to their clients and contribute to a more sustainable and ethical capital market. References: Accelerating and digitalising ESG with Bursa Malaysia’s Centralised Sustainability Intelligence Platform. (2023, August 14). The Edge Malaysia. https://theedgemalaysia.com/content/advertise/accelerating-digitalising-esg-bursa-malaysia-centralised-sustainability-intelligence-platform Author’s Profile: Ifrah Bukhari is a certified Business Analyst with expertise in IT consulting and business analysis. She specializes in sustainable business practices, holding certifications in ESG risks and opportunities, climate change, and risk identification and materiality. Currently a Business Analyst at Softech360, Ifrah drives ESG reporting and consulting services. With a deep understanding of the challenges organizations face in adopting sustainability, she helps clients identify improvement opportunities and implement effective strategies to achieve their ESG goals. As a published author, Ifrah’s ability to bridge IT and sustainability enables her to provide comprehensive solutions that drive long-term value for organizations, contributing to a more sustainable future.

Abstract ESG reporting is gaining momentum in Malaysia as businesses recognize the importance of sustainable practices. The regulatory framework provided by the Securities Commission encourages companies to disclose relevant ESG information, fostering transparency and accountability. ESG reporting offers numerous benefits, including enhanced long-term sustainability, improved risk management, and attraction of responsible investment. Investor demand for ESG information is growing, leading to increased adoption of ESG criteria in investment decisions. Future trends in ESG reporting include standardization and harmonization, technology integration, focus on materiality, stakeholder engagement, expanded scope, increased investor demand, and regulatory developments. As Malaysia moves towards a greener and more socially responsible future, ESG reporting will continue to play a pivotal role in shaping businesses’ strategies and decision-making processes. Introduction: Environmental, Social, and Governance (ESG) reporting has gained increasing prominence in recent years as businesses worldwide recognize the importance of sustainable practices. In Malaysia, companies are also embracing this trend, as stakeholders demand greater transparency and accountability in their operations. This article explores the current state of ESG reporting in Malaysia, the regulatory framework supporting it, and the benefits it offers to businesses and society at large. The Regulatory Landscape and Different Frameworks: In Malaysia, the Securities Commission (SC) has taken significant steps to promote ESG reporting. In 2018, the SC introduced the Sustainability Reporting Framework (SRF) as a voluntary guideline for listed companies. The SRF aligns with international standards such as the Global Reporting Initiative (GRI) and encourages companies to disclose relevant ESG information in their annual reports. While compliance with the SRF was voluntary, listed companies were encouraged to adopt it to enhance their ESG performance and meet the growing expectations of investors and stakeholders. In 2016, ESG reporting was made mandatory for Public Listed Companies by Bursa Malaysia. The SC issued revised guidelines on sustainable and responsible investment funds in February 2023. It’s important to note that while Bursa Malaysia recommends the use of the GRI Standards, the adoption of specific reporting frameworks remains voluntary for listed companies. However, companies that choose not to adopt these frameworks are encouraged to provide clear and robust ESG disclosures that meet stakeholders’ expectations. Global Reporting Initiative (GRI) is the leading and widely used reporting framework in Malaysia, but several other frameworks are also used by companies for ESG reporting. These frameworks include Sustainability Reporting Framework (SRF) by Securities Commission Malaysia (SC), Carbon Disclosure Project (CDP) and United Nations Sustainable Development Goals (SDGs). However, on 11th April 2023, the Malaysian Government announced to launch a new framework for ESG reporting focusing on small and medium enterprises (SMEs). This reporting framework will be available to use by the end of 2023. Benefits of ESG Reporting: ESG reporting provides numerous benefits to both businesses and society. By incorporating ESG factors into their decision-making processes, companies can identify risks and opportunities that traditional financial reporting may overlook. This enables businesses to enhance their long-term sustainability, manage reputational risks, and attract responsible investment. Moreover, ESG reporting fosters transparency and accountability, allowing stakeholders to make informed decisions and hold companies accountable for their environmental and social impacts. Driving Sustainable Practices: ESG reporting acts as a catalyst for companies to adopt sustainable practices, thereby addressing pressing environmental and social challenges. By disclosing their carbon emissions, water consumption, waste management, and other environmental metrics, companies can identify areas for improvement and set targets to reduce their ecological footprint. Additionally, reporting on social aspects such as employee welfare, diversity, and community engagement helps to foster a positive corporate culture and build stronger relationships with stakeholders. Investor Demand for ESG: Investors are increasingly recognizing the importance of ESG factors in evaluating investment opportunities. Many institutional investors and asset managers have incorporated ESG criteria into their investment decision-making processes. This growing demand for sustainable investments has led to a surge in green bonds and sustainability-linked financing in Malaysia. ESG reporting allows companies to demonstrate their commitment to sustainability, attracting responsible investors who prioritize long-term value creation. Challenges and Opportunities: While ESG reporting in Malaysia is gaining momentum, there are still challenges to overcome. Some companies may perceive ESG reporting as an additional burden, requiring resources and expertise they may lack. However, the benefits of ESG reporting far outweigh the costs, as it enhances a company’s reputation, attracts investors, and mitigates risks. Moreover, the availability of ESG reporting frameworks and guidelines, such as the SRF, helps companies navigate the reporting process effectively. Future trends in ESG reporting: 1. Standardization and Harmonization: As ESG reporting becomes more prevalent globally, there is a growing need for standardization and harmonization of reporting frameworks. Companies and investors alike are calling for a unified set of standards to ensure consistency and comparability of ESG data. Organizations such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) are working towards aligning their frameworks, which will streamline reporting processes and enhance credibility. 2. Integration of Technology: Technology will play a crucial role in the future of ESG reporting. Artificial intelligence, machine learning, and data analytics will enable companies to collect, analyse, and report ESG data more efficiently. This will not only streamline the reporting process but also enhance the accuracy and reliability of the information disclosed. Furthermore, technology can facilitate real-time monitoring and reporting, allowing companies to address ESG issues promptly. 3. Focus on Materiality: In the future, there will be an increased emphasis on materiality in ESG reporting. Materiality refers to identifying and reporting on the ESG issues that are most relevant and impactful to a company’s business and stakeholders. By focusing on material issues, companies can provide more targeted and meaningful information, enabling investors and stakeholders to make better-informed decisions. 4. Stakeholder Engagement: ESG reporting will evolve to include more robust stakeholder engagement. Companies will seek to involve a broader range of stakeholders, including employees, customers, communities, and non-governmental organizations (NGOs), in the reporting process. This will ensure that ESG reporting reflects the diverse perspectives and concerns of all stakeholders, fostering transparency and accountability. 5. Expanded Scope: In the future, ESG …

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This White Paper discusses the concept of ESG (Environmental, Social, and Governance) readiness assessment and its importance for organizations in addressing sustainability issues. It highlights the need for organizations to evaluate their current ESG compliance status before embarking on an ESG transition plan. The paper explains the process of ESG readiness assessment, including the evaluation of policies, practices, and procedures related to ESG, as well as the organization’s capacity to manage risks and opportunities in these areas. It mentions various tools and frameworks available to assist organizations in conducting ESG readiness assessments, such as SASB, GRI, and TCFD. The paper also emphasizes the significance of ESG reporting as a strategic opportunity for businesses to demonstrate their commitment to sustainability, access new sources of capital, and improve their reputation. It provides recommendations for improving ESG reporting, including conducting robust materiality assessments, integrating. Open the attached PDF file to read the joint White Paper on ESG Readiness in Malaysia by Softech360 and ESG Disclose. Read PDF