Inovatif

Category: sustainability

  • BMW Group Malaysia Introduces New EV Charging Facilities Across the Klang Valley, Negeri Sembilan and Pahang.

    BMW Group Malaysia Introduces New EV Charging Facilities Across the Klang Valley, Negeri Sembilan and Pahang.

    BMW Group Malaysia, in partnership with its authorised dealers and key charge point operators, unveils four new EV charging facilities across the Klang Valley, Negeri Sembilan and Pahang. The introduction of these new charging facilities across various key locations aims to provide all EV owners with greater peace of mind for interstate travel, while ensuring convenient and accessible charging options within key regions.

    “By introducing more state-of-the-art charging facilities across the country, we are emphasising our commitment to an Electrified Future for Malaysia, which has also been well-represented by the rapid unveiling of more fully electrified models from both BMW and MINI within just the first half of 2024. As the Number One Premium Electric Vehicle Provider in Malaysia, we believe that these facilities do more than serve our customers; they form the backbone of a nation moving towards embracing comprehensive Electrified Mobility,” said Benjamin Nagel, Managing Director at BMW Group Malaysia.

    Within the Klang Valley, BMW Group Malaysia introduces two new charging facilities. The first facility, located at The Curve in Mutiara Damansara, is established in partnership with Quill Automobiles and ChargeSini. The facility is equipped with 47 kW DC chargers, with charging rates priced at RM1.39/kWh. The second facility, established in partnership with Millennium Welt and ChargeSini, brings three 22 kW AC chargers to Imperial Lexis in Kuala Lumpur, with a charging rate starting from RM1.00/kWh.

    In Negeri Sembilan, BMW Group Malaysia, in partnership with Millennium Welt, is introducing two BMW i Wallbox units at CMH Specialist Hospital in Seremban. Each Wallbox provides an AC output of 7.4 kW, providing complimentary charging for hospital staff. Lastly, in Pahang, Zenith Hotel Kuantan is now equipped with a 160 kW DC fast charger, priced at RM1.69/kWh, courtesy of the partnership with Millennium Welt Kuantan and EL Charge.

    The new charging facilities are part of BMW Group Malaysia’s strategy to develop the comprehensive infrastructure needed for the charging of electric vehicles, together with like-minded local partners, dealers and key charging providers. Over 2,020 charging facilities have been made available by BMW Group Malaysia for EV owners here so far, through strategic partnerships with various EV charging providers in Malaysia. Over 100 BMW i and MINI charging facilities are also available at most authorised dealerships, as well as partnering venues across the country, with more to come as part of the strategic infrastructure expansion plan set for the year ahead.

    For more information on the BMW Group Malaysia’s charging solutions, visit https://www.bmw.com.my/en/topics/bmw-owners/bmw-charging-solution.html.

    The BMW Group
    With its four brands BMW, MINI, Rolls-Royce and BMW Motorrad, the BMW Group is the world’s leading premium manufacturer of automobiles and motorcycles and also provides premium financial and mobility services. The BMW Group production network comprises over 30 production sites worldwide; the company has a global sales network in more than 140 countries. In 2023, the BMW Group sold over 2.55 million passenger vehicles and more than 209,000 motorcycles worldwide. The profit before tax in the financial year 2023 was € 17.1 billion on revenues amounting to € 155.5 billion. As of 31 December 2023, the BMW Group had a workforce of 154,950 employees. The success of the BMW Group has always been based on long-term thinking and responsible action. The company set the course for the future at an early stage and consistently makes sustainability and efficient resource management central to its strategic direction, from the supply chain through production to the end of the use phase of all products.

    Website: www.bmwgroup.com
    LinkedIn: http://www.linkedin.com/company/bmw-group/
    YouTube: https://www.youtube.com/bmwgroup
    Instagram: https://www.instagram.com/bmwgroup
    Facebook: https://www.facebook.com/bmwgroup
    X: https://www.x.com/bmwgroup

     

  • Malaysia’s Journey Towards Self-sufficiency

    By Jonathan Di Rollo  

    Independence has been cherished by Malaysians for decades but in a rapidly changing world creating sustainability through economic self-sufficiency has become an increasingly important priority. With sustainable independence as a new priority, the questions of how to achieve this and in what time frame are important and need-considered answers.  

    Malaysia’s government has ongoing development plans to address these issues and answer these questions but every nation depends on, and serves, all of its people.  

    Public and private sector decision-makers are faced with leading and managing local talents and global partnerships in different sectors requiring different governance for achieving optimal outcomes. Leaders in each field have diverse experience to offer that can be used to keep independence going in sustainable directions through self-sufficiency that protects the country from global fluctuations and shocks. 

    Malaysia’s Self-sufficiency Milestones 

    1. Early Development (1957-1970)
    • 1957: Independence from British colonial rule. 
    • 1963: Formation of Malaysia, including Malaya, Sabah, Sarawak, and Singapore (until 1965 when Singapore separated). 
    • 1965: Establishment of Bank Negara Malaysia to manage the country’s monetary policy. 
    1. New Economic Policy (1971-1990)
    • 1971: Introduction of the New Economic Policy (NEP) aimed at reducing poverty and restructuring society to eliminate the identification of race with economic function. 
    • 1974: Establishment of Petronas, the national oil and gas company, marking a significant step towards energy self-sufficiency. 
    • 1981: Launch of the Proton car project, Malaysia’s first national car manufacturer, to reduce dependency on imported vehicles. 
    1. Industrialisation and Modernisation (1991-2000)
    • 1991: Introduction of Vision 2020 by Prime Minister Mahathir Mohamad, aiming for Malaysia to become a fully developed nation by 2020. 
    • 1994: Completion of the North-South Expressway, enhancing transportation infrastructure and boosting economic growth. 
    • 1996: Launch of the Multimedia Super Corridor (MSC) to transform Malaysia into a knowledge-based economy. 
    1. Economic Diversification and Innovation (2001-2010)
    • 2001: Implementation of the Third Industrial Master Plan, focusing on strengthening the manufacturing sector and developing new growth areas. 
    • 2005: Malaysia becomes a net exporter of oil and gas, achieving significant energy self-sufficiency. 
    • 2007: Introduction of the Ninth Malaysia Plan, emphasising human capital development and innovation. 
    1. High-Income Economy and Sustainability (2011-2020)
    • 2010: Launch of the Economic Transformation Programme (ETP) with the goal of making Malaysia a high-income economy by 2020. 
    • 2012: Introduction of the National Automotive Policy to further develop the automotive industry and encourage the production of energy-efficient vehicles. 
    • 2015: Implementation of the Goods and Services Tax (GST) to diversify government revenue sources. 
    • 2020: Achievement of several Vision 2020 goals, although not fully reaching high-income status, significant progress in economic development and self-sufficiency. 
    1. Post-2020 Initiatives and Ongoing Efforts
    • 2021: Introduction of the 12th Malaysia Plan, focusing on sustainable growth and enhancing the resilience of the economy post-COVID-19. 
    • 2022: Continued efforts in renewable energy adoption, aiming for 31% renewable energy capacity by 2025. 
    • 2023: Strengthening food security measures to reduce dependency on imported food products. 

     Malaysia’s Brand Ambassadors 

    Ambassadors perform as diplomats for their country all over the world but a country is a brand too and brand ambassadors represent the soul of the nation and embody all points of contact with the rest of the world.  

    Independent countries are still dependent on their people; their politicians, business people, artists, lawyers, scientists and inventors. High profile brand ambassadors for Malaysia include Datuk Lee Chong Wei, the celebrated Olympic medallist turned corporate and educational brand ambassador who embodies how a country will always depend on its people as leaders to carry on global partnerships that benefit themselves as well as the country. Leading in sport then business and education shows connectivity and influence in independence.  

    There are many more worthy Malaysians who have and continue to contribute to brand Malaysia in different ways in different sectors. The influence of these leaders to self-sufficiency is achieved through economic policies, development programs and well-managed resources. These key people are also role models for others showing us that we are always in dependence.  

    Food Security 

    In a country whose economy depends greatly on for agriculture, self-sufficiency in food is a top priority. In 2023 Malaysia’s self-sufficiency rate (SSR) for rice was at 62.6%, vegetables 44.7%, and fruits 78.1%, according to Datuk Chan Foong Hin, Deputy Agriculture and Food Security Minister. These headline figures for food security are just one part of the story in Malaysia’s self-sufficiency journey.  

    Ramly Processing Sdn. Bhd.  the renowned Malaysian frozen and fast-food company, founded by Ramly bin Mokni, tells an equally important story. From humble beginnings starting in 1984 with the aim of developing a clean and good-quality halal Western fast-food chain in Malaysia, Ramly began selling burgers with his wife. He discovered that it was unknown whether most fresh-meat sources were halal or not and decided to produce a halal-certified meat source for all Muslim consumers in Malaysia. With the halal economy expanding they increased production whilst maintaining stringent quality control. The Ramly Burger brand began to gain recognition not only for its halal certification but also for its taste and affordability becoming a national success story before starting to export to neighbouring countries of Singapore, Brunei, and Indonesia.  

    Halal certification contributes towards self-sufficiency by implementing legal frameworks and enforcement to promote the halal industry as a source of economic growth. Integration between halal finance and halal foods can create a new source of growth. Implementing halal standards and obtaining halal certification is crucial for industry players to export their products to Muslim markets and attract Muslim-friendly tourism.  

    Tech: Towards a Knowledge-Based Economy (K-Economy)  

    Malaysia has been embracing digital transformation for decades and continues to transition towards becoming a k-economy. With the government continuing to recognise that self-sufficient economic growth requires innovation, technology, and human capital development, initiatives taken include the Multimedia Super Corridor (MSC) started in 1979, followed by the Malaysia Digital Economy Blueprint. These technological advancements are pivotal for Malaysia to achieve greater self-sufficiency by reducing its dependency on external resources and foster innovation-driven growth. Former MDEC CEO Surina Shukri left a legacy through the development and execution of the Malaysia Digital initiative, which aims to create substantial digital economic spillovers through equitable access to digital tools, knowledge, and income opportunities.  

    “Predicated on a new framework built upon three primary components – Agility, Flexibility, and Relevance – the blueprint is set to enhance Malaysia’s value proposition to attract digital investments, firmly establishing Malaysia as the digital hub of ASEAN,” Shukri said during her tenure.  

    This strategy was validated by attracting major global tech investors, including Alibaba, which established its first regional e-commerce and logistics hub in Kuala Lumpur and more recently award-winning e-wallet provider Boost. These technological advances have also assisted SMEs in reducing transaction costs and expanding marketing enabling more self-sufficient business.  

    Most recently digital services have expanded to include telemedicine and E-Government and policies and strategies for adopting and using technology have also been applied to agriculture, fisheries and renewable energy in Malaysia reflecting the broad reach and impact of technology and its influence on self-sufficiency. 

    Internationalising Malaysia 

    One of the most high-profile Brand Ambassadors in Malaysia, Tan Sri Tony Fernandez, Capital A Sdn Bhd’ CEO, is an aspirational leader for Malaysians and foreigners alike. Air Asia has not only allowed more people to fly to more destinations than ever before but has also contributed to internationalising the nation.  

    Internationalising countries that lead the world can be seen by the boom in the Japanese economy, followed by China, turning them into world leading countries. However, these gains come with costs, and this is now a hot topic for sustainability. The environmental impact of air travel is closely watched by all airlines with transportation companies being major global contributors to carbon emissions. Addressing sustainability, Fernandez recently called on governments and aviation regulators in the region to improve air traffic management at airports so that airlines can burn less fuel instead of mandating them to use green fuel or sustainable aviation fuel (SAF) that are currently low in production. 

    “SAF is not going to change the world any time soon but there are things that we all can do now…SAF is just too expensive at the moment. There has to be a bigger supply…One per cent (of SAF) is not going to change a lot of things and passengers would have to fund this. Every passenger coming in has to pay a surcharge for SAF.”I would urge (the) governments inclusive of the Singapore government to sort out air traffic control. That’ll be a great place to start in terms of conserving fuel,” he said in a recent interview with local newspaper, New Straits Times.  

    The spill-overs from internationalising Malaysia may be difficult to quantify but there are strong arguments towards contributing to self-sufficiency. 

    Energy and the Environment 

    Any economic activity comes with costs as well as benefits and, with Oil & Gas contributing up to 30% of Malaysia’s GDP, strategies for sustainability in the energy sector have become a top priority. Given the importance of the oil price and its instability, the strategies of key energy sector players are influenced by national as well as international governance. Compliance with global sustainability goals has influenced decision-making and the dependence of the energy producing sector on self-sufficiency.  

    Strategies that diversify economic dependence may be equally important on the nation’s journey to self-sufficiency but these now include legal compliance and investor satisfaction which mean that economic independence is not the former only goal and sustainability is now an essential aspect of creating self-sufficiency. 

    Malaysia’s former Minister of Energy, Science, Technology and Climate Change (MESTECC) who did much during her tenure for adopting sustainable elements to Malaysia famously said, “Malaysia will not be the dumping ground of the world” in the Netflix documentary “Broken” that highlighted Malaysia’s plastic dumping problem. Another initiative by the ex-minister included setting-up a pollution monitoring system in Pasir Gudang Johor in 2019, following the incident where 4,000 people there experienced breathing difficulties. It was discovered that the main cause was due to gases released by chemical industries in the area. Lynas, a rare-earth processing company was also regulated after concerns were raised on radioactive waste.  

    These actions highlight that different levels of action on regulation are required even within the same economic sector and that self-sufficiency and independence are deeply intertwined. 

    Future self-sufficiency 

    Despite many milestones and significant progress made to date, Malaysia still faces challenges on its path to self-sufficiency. Economic inequality, regional disparities, and the need for continuous innovation are some of the issues that require ongoing attention.  

    External shocks such as the COVID-19 pandemic have highlighted vulnerabilities in global supply chains, underscoring the importance of building a resilient and self-sufficient economy. Investing in education, technology, and sustainable practices to remain relevant are key as well as managing the impact of these developments on enhancing social safety nets and addressing regional inequalities.  

    The Malaysian government’s commitment to the Shared Prosperity Vision 2030 (SPV 2030) is part of a vision that emphasises inclusivity and sustainability and by focusing on high-value industries, innovation, and human capital development, SPV 2030 can contribute to achieving self-sufficiency for Malaysia.  

    On the journey Malaysia will still rely on its people to make all these actions effective. National strategies, coupled with the contributions of individuals across various sectors, have laid the foundation for a self-sufficient, knowledge-based country that is globally connected.  

    As Malaysia and its people celebrate Merdeka month, reflecting on past achievements can yield lessons for future guidance that help clarify the path to self-sufficiency. The stories of entrepreneurs, educators, and environmentalists illustrate the human power of Malaysia’s economic vitality. Each individual’s contributions must be considered a source of inspiration, embodying the values of independence, innovation, and resilience that define Malaysia’s journey towards a prosperous and self-sufficient future. – (TSI) 

  • Overcoming Economic Fragmentation for Progress

    By Dr Carmelo Ferlito 

    “In essence, technological development can occur when Keynesian animal spirits, or positive profit expectations, are awakened and find the right environment for meaningful competition. Within these competitive processes, concentration dynamics emerge, enabling further technical progress through the exploitation of economies of scale.” 

    One of the main weaknesses, although not extensively discussed in policy debates, is the fragmented nature of Malaysian capitalism, encapsulated by the dichotomy between Micro, Small and Medium Enterprises (MSMEs) and large corporations. 

    In 2021, Malaysia had a total of 1,259,234 registered firms, with 1,226,494 being MSMEs (97.4%). This implies that, in terms of numbers, MSMEs nearly encompass the entire landscape of operating firms in Malaysia. Notably, 964,495 firms (76.59% of the total and 78.64% of MSMEs) were microenterprises, 242,540 (19.26%) were small firms, and only 19,459 (1.55%) were medium-sized enterprises. 

    MSMEs Snapshot 

    MSMEs play a crucial role, with the majority operating in services and employing nearly half of the workforce across various industries. 

    Sector Distribution 

    Service Sector: 83.85% 

    Construction: 8.01% 

    Manufacturing: 5.84% 

    Agriculture: 1.93% 

    Mining: 0.37% 

     

    Workforce Impact (2021) 

    Overall MSME Employment: 47.2% 

    Agriculture: 42.2% 

    Construction: 48.2% 

    Services: 49.5% 

    Manufacturing: 46.2% 

    Mining & Quarrying: 27.9% 

    The partial picture that emerges so far is that a country’s economy is dominated, in terms of the number of firms, by microbusinesses. MSMEs, in their entirety, represent more than 97% of the registered firms and employ almost half of the workforce. However, the question remains: How much do these MSMEs contribute to the national economy? 

    When we look at MSMEs’ contribution to the Gross Domestic Product (GDP), the figures tell a distinct story. In 2021, MSMEs accounted for 37.36% of Malaysia’s GDP, slightly down from 38.13% in 2020 and 38.86% in 2019. Notably, their impact was more significant in agriculture (55.25%) and construction (48.27%), while their contribution was less than 40% in services and manufacturing and just 2.79% in mining. 

    The data is straightforward: 97.4% of Malaysian firms contributed 37.36% to the GDP, while the remaining 2.6% (large enterprises) generated 62.64%. 

    The dispersed nature of Malaysian capitalism—which I would define as an archipelago—is confirmed by one of the most used indexes to measure industrial concentration, the Herfindahl–Hirschman Index (HHI). According to the guidelines of the United States Department of Justice, an industry is highly concentrated when HHI is above 2,500 (and up to the maximum level of 10,000), moderately concentrated with an HHI between 1,500 and 2,500, and an index below 1,500 characterises a low level of concentration. 

    According to the data collected by the World Integrated Trade Solution (WITS), provided by the World Bank, the Herfindahl-Hirschman (HH) market concentration index for Malaysia was 800 between 2015 and 2018. However, it increased to 900 in 2019 and further rose to 1,000 in 2020. Therefore, despite experiencing an upward trend in recent years, the level of market concentration in Malaysia remains low. This aligns with the depiction of a dispersed archipelago of firms emerging from the data provided by the Department of Statistics Malaysia (DOSM) mentioned above. 

    Following the traditional textbook definition of competition, an economist should be pleased to observe the low level of concentration within Malaysian capitalism and the prevalence of a model of semi-perfect competition. However, my stance is critical in this regard. 

    In fact, I believe that such a capitalistic structure poses an obstacle to addressing some of the most debated topics in policy conversations. The first concern is related to low wages and social mobility: as per the ongoing debate, Malaysia faces challenges with low and stagnant wages, and this condition acts as an incentive for the phenomenon of brain drain. 

    The situation is accompanied by a rise in skill-related underemployment. The upward trend in skill-related underemployment predates the Great Lockdown, and, although moderating, it remained high at 36.7% in Q2-2022, significantly exceeding the 31.4% recorded in 2017. 

    However, a fragmented structure of capitalism is not solely a barrier to wage increases and social mobility. Two additional challenges that necessitate the promotion of industrial concentration are social protection and technical progress. These issues also hold considerable significance in policy discussions. 

    The Malaysian social protection system is often deemed inadequate and a hindrance in the battle against poverty. While global experience teaches us that large-scale government-run welfare systems are inefficient and economically unsustainable, the only path for employees to access better social protection conditions is to work for large enterprises. These companies, generally more resilient to economic crises, are better positioned to provide comprehensive protection, including medical coverage. 

    In the current stage of capitalism’s evolution, as described by Joseph A. Schumpeter (Business Cycles, 1939; Capitalism, Socialism and Democracy, 1942) and later by his disciple Paolo Sylos Labini (Oligopoly and Technical Progress, 1957), technological leaps are conceivable only within the process of industrial concentration. These advancements occur not as a result of government planning but rather emerge from economies of scale precisely fostered by the competitive process. 

    Furthermore, and precisely for this reason, technological leaps cannot be enforced through centralised policy decisions. New production techniques, ceteris paribus, will only be adopted if they are anticipated to yield a greater “return from a given investment of factors” (F.A. Hayek, The Pure Theory of Capital, 1941). 

    From a policy perspective, the initial step should involve removing policy-induced obstacles to the process of industrial concentration. A case in point is the rice industry, which is artificially kept fragmented and underdeveloped due to unfavourable policies. 

    Strategies to Boost Entrepreneurial Growth  

    Trade Liberalisation 

    Why? Access to a broader market leads to higher demand. 

    How? It motivates enterprises to grow and fosters international competition through economies of scale. 

    Entrepreneurial Networks 

    What? Cooperative partnerships among companies via a “Contract of Network.” 

    Why? Enhances collaboration, facilitates sharing of information and provides mutual support. 

    Benefit: Special fiscal treatment to encourage and reward entrepreneurial collaboration. 

    Implementing these strategies can empower entrepreneurs, facilitate market access and create a supportive environment for business growth. 

    In essence, technological development can occur when Keynesian animal spirits, or positive profit expectations, are awakened and find the right environment for meaningful competition. Within these competitive processes, concentration dynamics emerge, enabling further technical progress through the exploitation of economies of scale. 

     

    ABOUT THE WRITER

    Dr Carmelo Ferlito (born in Verona, Italy, in 1978) serves as the CEO of the Center for Market Education (CME) and is a senior fellow at the Institute for Democracy and Economic Affairs (IDEAS) in Kuala Lumpur, Malaysia. Additionally, Dr Ferlito works as a research advisor for Provalindo Nusa Property in Jakarta, Indonesia. He holds the position of visiting professor at Taylor’s University in Subang Jaya, Malaysia, and is a Senior Fellow (Southeast Asia) at the Property Rights Alliance in Washington, DC, USA. 

  • Funding Societies and STACS ESGpedia Empower SMEs for Sustainable Growth

    Funding Societies and STACS ESGpedia Empower SMEs for Sustainable Growth

    KUALA LUMPUR, 15 August 2024 – Funding Societies, Southeast Asia’s largest unified digital
    finance platform for small and medium enterprises (“SMEs”), in collaboration with STACS
    ESGpedia, Asia’s leading ESG data and technology company, successfully hosted an ESG
    Gathering titled “Fostering Sustainable Growth: Empowering SMEs within Supply Chains
    Through ESG Reporting.” The event aimed to equip SMEs with the necessary tools and guidance
    to navigate the complex landscape of ESG reporting, thereby advancing their sustainability
    practices and enhancing business resilience.

    Mr Rizal Dato’ Nainy, CEO of SME Corp. Malaysia delivered the keynote speech, focusing on the
    critical role of ESG for SMEs and highlighted the government’s ongoing support for sustainability
    initiatives. He noted that integrating ESG principles into business operations is now essential for
    SMEs to remain competitive and resilient. Besides Funding Societies and STACS ESGpedia,
    the event also features speakers from Capital Markets Malaysia (“CMM”) and Thoughts in Gear (“TIG”), underscoring the importance of collective action in driving sustainable growth. Speakers from CMM and TIG also contributed valuable insights into how SMEs can adopt and benefit from
    ESG practices.

    The importance of ESG reporting was further underscored by discussions on how it can drive
    innovation, enhance brand reputation, and attract investment opportunities. In an increasingly
    competitive market, SMEs that integrate ESG practices stand to benefit from stronger business
    resilience and improved access to capital. The gathering highlighted that the growing demand for
    transparent ESG disclosures from financial institutions, consumers, and regulatory bodies is not
    just a trend but a fundamental shift in how businesses operate in future.

    Chai Kien Poon, Country Head, Funding Societies Malaysia, remarked,” 97% of businesses
    in Malaysia are SMEs. A common misconception persists that ESG is only relevant to large
    corporations and multinational companies (“MNCs”). However, SMEs within the corporate supply
    chain must also deal with more complex regulations, meet higher quality standards and adjust to
    specific demands of the corporate partners. SMEs often overlook the impact of ESG to their
    businesses. It is clear that SMEs must choose new and innovative strategies that allow their
    businesses to stay agile and collaborative. Especially, in the midst of increased regulatory and
    investor requirements for listed companies and MNCs to act on climate change and other
    environmental issues.”

    “Funding Societies is committed to provide Malaysian SMEs with access to financing and support
    their journey towards adopting sustainable business practices. We are excited to extend our
    partnership with STACS ESGpedia in Malaysia to advance our mission. We hope this event will
    help to empower Malaysian SMEs to become more mindful of their activities and equip them with
    the resources needed to start their ESG journey.

    Benjamin Soh, Founder and Managing Director at STACS ESGpedia, said: “As an ESG
    reporting platform in the Capital Markets Malaysia’s Simplified ESG Disclosure Guide (“SEDG”)
    Adopter Programme, we are delighted to be furthering our partnership with Funding Societies to
    facilitate ESG reporting amongst Malaysian SMEs. This will help SMEs in the country better
    position themselves and manage the increasing ESG regulatory requirements today. With SMEs
    contributing largely to Asia’s supply chains, digital enablement will be a key factor affecting the
    region’s supply chain competitiveness, especially for carbon-intensive markets.”

    The ESG Gathering served as a significant step towards closing the ESG data gap among
    Malaysian SMEs, highlighting the importance of sustainable practices and providing the
    necessary tools to help SMEs thrive in an increasingly ESG-focused world.

     

     

  • Malton and RHB Collaborate to Offer Attractive Financing for Green-Certified River Park

    Malton and RHB Collaborate to Offer Attractive Financing for Green-Certified River Park

    Kuala Lumpur, 20 June 2024 – Malton Berhad (Malton or Group) has partnered with RHB Banking Group (RHB or the Bank) to offer attractive green home financing options for River Park homebuyers at Bangsar South. This partnership aims to make eco–friendly living more accessible for Malaysians seeking a sustainable lifestyle.

    Through RHB’s innovative Green Home Financing programme, River Park buyers can enjoy a loan margin of up to 95%, along with a 5% MRTA/MRTT/FEC (Mortgage Reducing Term Assurance/Mortgage Reducing Takaful Term/Finance Entry Cost).

    (from left) Fong Weng Chuin (Head, Developer & Realtor Management, RHB Banking Group), Jeffrey Ng (Managing Director, Group Community Banking, RHB Banking Group), Kelvin Choo (CEO – Property Development of Malton Berhad) and Angela Ong (General Manager, Sales & Marketing, Malton Berhad) formed a strategic partnership to promote sustainable living at River Park.

    “Targeting first–time homebuyers, this easy–entry financial program aims to incentivise their purchase decisions and provide them with the flexibility to own a sustainable urban home. Awarded a provisional GreenRE Bronze certification and integrated with EV charging stations, River Park attracts many urban professionals and young families looking for sustainable urban living surrounded by vibrant hubs. We will also to incorporate more green features into our upcoming projects, such as Park Green at Bukit Jalil City and Mutiara Lake Puchong,” stated Mr. Kelvin Choo, CEO of Malton Property Development.

    Mr. Jeffrey Ng Eow Oo, Managing Director of Group Community Banking, RHB Banking Group, added, “RHB recognises the crucial role of providing sustainable financing to support Malaysia’s transition to a low-carbon future. In 2023, we provided financing of close to RM700 million to support the development and certification of green buildings in Malaysia. We are pleased to partner with Malton to contribute to the growth of the green economy and progress towards a more sustainable future for all.”

    River Park offers a stunning view of Kuala Lumpur City Centre and great connectivity to nearby schools, medical institutions, and retail hubs such as Mid Valley, Bangsar Village and The Sphere. Malton has also invested RM10 million in constructing a new ingress from the NPE–Federal Highway link for enhanced accessibility. The well–developed infrastructure, including the nearby Angkasapuri KTM station and easy access to public transportation, leads to a significant carbon footprint reduction, aligning with Malton’s sustainability journey.

    The three tower blocks of River Park condominium, with Tower B being the latest release, have achieved a healthy take–up rate of 65%. The development comprises 1,332 units across three towers, offering a variety of well–designed, eco–friendly two—and three-bedroom layouts ranging from 812 sq ft to 1180 sq ft. With an estimated gross development value of RM1 billion, this project is slated for completion in 2026. – TSI

  • ESG Reporting

    In the ever-evolving landscape of corporate practices, the emergence of ESG reporting has become a beacon of sustainability, transparency, and accountability. However, navigating the intricate terrain of ESG comes with its fair share of challenges. From the potential for misrepresentation to the spectre of fraud, the journey toward ESG excellence is a complex one.

    In the heart of the Asia-Pacific region, Bursa Malaysia has taken the lead in championing ESG initiatives. The FTSE4Good Bursa Malaysia (F4GBM) Index, a collaborative effort with FTSE Russell, stands as a testament to Malaysia’s commitment to sustainable practices. It serves not just as an index but as a catalyst, guiding investor decisions, enhancing visibility for high-performing companies, and advocating for transparency. The objective is clear – to pave the way for a transition toward a sustainable economy.

    Yet, as these initiatives unfold, a question lingers: Are governments, industries, society, and individuals truly ready for ESG? While sceptics may dismiss ESG as a passing trend, there is a growing consensus that it represents a fundamental shift in how businesses approach sustainability and responsibility.

    The journey is not without its hurdles. Inconsistent and complicated standards pose a challenge, making it difficult to compare the performance of different companies. The remedy lies in engaging subject matter experts and empowering in-house talent to champion the cause. Training and internalization of ESG principles are crucial, for they will be the evangelists shaping the organization’s journey.

    Enter the peril of “greenwashing,” where organizations exaggerate or misrepresent their ESG initiatives for a positive public image. The antidote? Transparent data, a shield against the vulnerabilities of deceptive claims. In the realm of ESG, accurate and complete data reigns supreme. Manipulation, cherry-picking, or selective reporting is a risky game that leads to dire consequences. Amidst these challenges, the call is for a balance between short-term gains and long-term sustainability goals. Organizations must fortify themselves against environmental, social, and governance risks to avoid sustained financial underperformance. The complexity of ESG factors adds another layer of difficulty. The interrelated issues demand effective identification, measurement, and reporting.

    Stakeholder engagement emerges as a linchpin. Limited communication with investors, employees, and communities hampers the effectiveness of ESG reporting. The call is for a combination of top-down and bottom-up approaches, with leadership understanding and appreciating the purpose of ESG. Yet, amid challenges, there is an opportunity to demystify ESG concepts. Engagement with ESG principles becomes a long-haul game, emphasizing sustained commitment and strategic planning. The key is simplification, making complex concepts accessible to a broad audience.

    Use plain language, devoid of technical jargon, to ensure a common understanding. Tell compelling stories that bring abstract concepts to life. Visual representation through infographics and charts simplifies complexity. Focus on key metrics, avoiding information overload. Relate ESG to everyday life, connecting it to core values and using analogies for clarity.

    Concrete examples become the embodiment of ESG practices within the organization. Interactive learning opportunities, educational campaigns, and stakeholder engagement become integral. The narrative becomes dynamic, with stakeholders actively participating in the dialogue about ESG.

    As organizations move forward, the path becomes clearer. Evaluation of operational aspects, determination of specific data, and formulation of clear targets become essential steps. Customized ESG strategies, stakeholder consultations, and robust data systems ensure the journey is not just navigable but purposeful.

    Technology becomes an ally, with machine learning and artificial intelligence streamlining processes. ESG principles infuse into the very fabric of business strategy and organizational structure. Understanding ESG regulations and clear reporting become non[1]negotiables, presenting transparent reports that resonate with stakeholders.

    The call is not just for individual organizations but for collective action. Malaysia’s journey toward ESG excellence necessitates the development of local ESG standards. Collaboration with local stakeholders, supported by global subject matter experts, becomes imperative. A standard that is locally relevant and globally recognized becomes the lodestar for governments, multi-sectors, corporations, and enterprises.

    Transparent ESG reporting becomes more than a corporate obligation; it becomes a powerful tool for showcasing commitment to sustainability, building trust, and driving positive change. The change begins here, now. Embrace transparent ESG reporting, not just as a corporate responsibility but as a beacon guiding the way toward a sustainable future.

     

    ESG ENGAGEMENT MAKING IT DIGESTIBLE

    Engaging with ESG principles requires sustained commitment and strategic planning. Simplifying complex concepts is key:

    • Use Plain Language: Avoid technical terms and use accessible language for a broad audience. In-house training ensures a common understanding of ESG.
    • Tell Compelling Stories: Real-life examples make abstract concepts tangible, fostering a personal connection with ESG principles.
    • Visual Representation: Infographics, charts, and diagrams simplify complex data, enhancing understanding for stakeholders.
    • Focus on Key Metrics: Highlighting relevant ESG metrics prevents information overload, focusing on the most impactful indicators.
    • Relate to Everyday Life: Draw parallels between ESG principles and everyday experiences, making them relatable.
    • Connect to Core Values: Emphasize how ESG aligns with core values, showcasing an organization’s commitment to positive impact.
    • Use Analogies: Employ analogies to explain complex ESG concepts, making them easier to grasp.
    • Provide Practical Examples: Concrete examples of ESG practices within the organization demonstrate commitment.
    • 9Interactive Learning: Engage stakeholders through workshops or webinars for dynamic discussions and idea exchange.
    • Educational Campaigns: Launch campaigns using various channels to raise awareness about ESG, making it fun and engaging.

    MOVING FORWARD

    Implementing these strategies demystifies ESG concepts, making them approachable for a broad range of stakeholders:

    • Evaluate Operational Aspects: Identify material environmental, social, and governance elements for your organization.
    • Determine Specific Data: Focus on material topics and ensure data veracity.
    • Formulate Clear Targets: Align ESG targets with values, objectives, and reporting standards.
    • Construct Customised Strategy: Develop a roadmap and relatable communication for stakeholders.
    • Stakeholder Consultations: Involve stakeholders in strategy development.
    • Establish Robust Data Systems: Implement agile data collection and management systems.
    • Utilise Technology: Leverage machine learning and AI for streamlined processes.
    • Infuse ESG into Business Strategy: Embed ESG principles into the organizational structure. 10 Clear Rep.
    • Understand ESG Regulations: Ensure compliance with applicable regulations.
    • Clear Reporting: Present transparent reports to stakeholders, emphasizing organizational achievements and goals.

     

    Rizal Kamaruzzaman is Executive Director of Tindakan Strategi Sdn Bhd a homegrown organisation and a strategic bespoke consulting firm focusing on international business development, ESG, policies, business intelligence analytics, people development and organisation reengineering. He is also the Chief Business Officer at LC Wakaful Digital Sdn Bhd the creator of GoBarakah a ground-breaking Social Assistance Platform designed to transform the way social assistance is distributed. At the international stage he is the Executive Secretary to the World Zakat and Waqf Forum (2023 – 2026), a 43 nation member caucus focussing on zakat and waqf development and diplomacy.

  • Unmasking the GREENWASH

    The climate sirens blare, demanding attention from corporations and their environmental practices. While eco-conscious consumers and investors chant the mantra of “sustainability,” a cunning adversary lurks behind the shiny facade: greenwashing. This deceptive art form uses misleading claims and superficial gestures to paint a picture of environmental friendliness, masking the dark reality of unsustainable practices.

    In Southeast Asia, greenwash brushstrokes are as prevalent as monsoon rains. From misleading labels touting “biodegradable” plastics that crumble instead of decomposing, to vague whispers of “carbon neutrality” devoid of concrete reduction strategies, businesses manipulate consumer perception with a magician’s sleight of hand. A 2020 Malaysian study by the Centre for Governance and Political Affairs (CGPA) revealed a shocking truth: over 40% of surveyed companies indulged in greenwashing. They cherry-picked positive environmental data while ignoring the negative, threw around ambiguous terms like “eco-friendly” without evidence, and focused on marketing campaigns instead of actual sustainability initiatives.

    The consequences of this greenwashing charade are far-reaching. Misled consumers, armed with false information, make purchasing decisions that hinder progress towards a truly sustainable future. Meanwhile, genuinely environmentally conscious businesses are unfairly disadvantaged by their greenwashed competitors, creating a market rife with unfair competition.

    But amidst this deceptive darkness, beacons of hope illuminate the path towards authentic sustainability. Businesses across Southeast Asia are taking genuine steps towards environmental and social responsibility, embracing the principles of Environmental, Social, and Governance (ESG) practices. In Indonesia, PT Unilever Indonesia’s “Pengepulan Minyak Jelantah” program collects and recycles used cooking oil, preventing harmful waste from polluting the environment. Singapore’s DBS Bank has integrated sustainability into its core, with initiatives like green financing solutions and partnerships with renewable energy projects.

    However, genuine sustainability cannot be confined to mere compliance with ESG frameworks. It demands a deep commitment to responsible business practices, unwavering transparency, and meaningful stakeholder engagement. Businesses must ditch token gestures and focus on systemic change, weaving sustainability into the very fabric of their value chains.

    Malaysia shines a bright light on authentic sustainability practices with companies like Sime Darby Plantation and Eco-Friend leading the charge. Sime Darby Plantation, a major agribusiness player, has carved a path towards a deforestation-free future with its unwavering commitment since 2014. They’ve gone beyond mere promises, earning accreditation from the Roundtable on Sustainable Palm Oil (RSPO) and setting ambitious goals like achieving net-zero emissions by 2050. Their dedication extends beyond policies, impacting local communities through partnerships with indigenous groups for conservation efforts and empowering farmers through sustainable agricultural practices. This commitment has earned them well-deserved recognition, including the prestigious Forest Heroes Award in 2022.

    Meanwhile, Eco-Friend, a social enterprise, paints a vibrant picture of sustainability with its upcycling initiative. Transforming discarded plastic bottles into stunning, handcrafted home décor and accessories, they not only divert waste from landfills but also empower marginalized communities. Eco-Friend’s dedication has breathed new life into over 500,000 plastic bottles, providing fair wages and valuable skill development to over 100 women from underprivileged backgrounds. Their story is a testament to the transformative power of sustainability, where environmental responsibility beautifully intertwines with social empowerment.

    These Malaysian champions showcase that genuine sustainability is not just an abstract concept but a tangible force capable of shaping a brighter future. Their successes demonstrate that environmental responsibility and economic prosperity can coexist, attracting investment, enhancing brand reputation, and ultimately driving long-term success for both businesses and communities. Their stories ignite a spark of hope, urging others to join the movement and illuminate the path towards a more sustainable Malaysia, and by extension, a more sustainable world.

    Yet, the greenwash bite extends far beyond misleading consumers. It directly impacts local communities, particularly in Southeast Asia, where vulnerable populations bear the brunt of unsustainable practices. False promises of “clean” energy, like mining “clean coal” or building supposedly “eco-friendly” hydropower dams, can displace indigenous communities, destroy ecosystems, and pollute vital water sources. Greenwashed waste management, with misleading claims about “biodegradable” products or inadequate recycling initiatives, leads to increased waste accumulation in villages and towns, posing health risks and environmental hazards. Even under the guise of “sustainability,” harmful practices like land grabs and unfair labour conditions in agricultural supply chains can exploit local communities, trapping them in poverty cycles.

    Recognizing the detrimental effects of greenwashing, Southeast Asian countries are taking steps, albeit uneven, to strengthen regulations and enforcement. In Malaysia, a beacon of progress shines with the Securities Commission Malaysia (SC) introducing comprehensive sustainability reporting requirements for publicly listed companies in 2022. These mandatory regulations, effective for financial years starting from June 2023, demand transparency in environmental and social performance, marking a significant step towards holding businesses accountable for their sustainability claims.

    Indonesia also showed promise with its Ministry of Environment and Forestry establishing the “Ecolabel” system in 2011. This green labelling system certifies products based on their environmental performance, empowering consumers with informed choices. However, the system’s effectiveness faces challenges due to limited awareness and enforcement capacity, highlighting the need for further development and support.

    Meanwhile, Singapore’s Environmental Protection Agency remains active in raising awareness about greenwashing through various campaigns and initiatives, contributing to a more informed consumer base. Though pinpointing a specific campaign requires further details, the agency’s ongoing efforts undoubtedly play a crucial role in combating greenwashing’s deceptive reach.

    However, challenges remain. Regulatory frameworks across the region are uneven and riddled with loopholes and inconsistencies that greenwashing perpetrators can exploit. Additionally, a lack of resources and enforcement capacity hinders effective implementation.

    Addressing greenwashing requires a multi-pronged approach, a collective symphony played by consumers, businesses, governments, and NGOs. Consumers must become informed, equipping themselves with knowledge about greenwashing tactics and reliable verification platforms like the Rainforest Alliance and Forest Stewardship Council (FSC). They must demand transparency, asking businesses for concrete data and evidence to support their sustainability claims. Supporting genuine efforts and empowering their voices through social media and community engagement are crucial actions consumers can take.

    Businesses, on the other hand, must embrace genuine sustainability. Token gestures have no place in this orchestra; integrating sustainability into core operations and decision[1]making is the key melody. Prioritizing transparency by publishing accurate and accessible environmental and social data, undergoing independent audits when necessary, and collaborating with stakeholders to develop and implement effective sustainability solutions are vital chords in this symphony.

    Finally, leading by example and inspiring others to follow suit can create a harmonious shift towards a more sustainable business landscape. Governments must strengthen regulations, crafting and enforcing comprehensive regulations that address greenwashing tactics across different industries. Holding perpetrators accountable with penalties and sanctions for misleading claims and non-compliance with sustainability standards is like tuning the instruments for better performance. Fostering regional cooperation, sharing best practices, and harmonizing regulations across Southeast Asia create a united chorus against greenwashing. Finally, investing in enforcement, allocating resources and training enforcement personnel to effectively monitor and implement regulations, ensures the entire symphony operates in rhythm.

    NGOs, the conductors of this transformative ensemble, must educate and raise awareness through workshops, campaigns, and educational programs, empowering consumers to recognize and combat greenwashing. Advocating for stronger regulations by collaborating with policymakers and government agencies ensures the score aligns with ethical principles.

    Supporting and partnering with businesses to develop and implement authentic sustainability initiatives showcase successful models of collaboration, setting the perfect tempo for change. Finally, monitoring and reporting greenwashing practices through research, investigations, and public campaigns shine a spotlight on the disharmonious notes, ensuring accountability and continuous improvement.

    By working together, consumers, businesses, governments, and NGOs can create a powerful force for change. It’s time to move beyond the greenwashed facade and embrace genuine sustainability, building a future where environmental responsibility is not just a marketing ploy but a core principle driving our economies and societies towards a brighter, healthier planet.

    Remember, the fight against greenwashing is an ongoing performance, and your voice is a critical instrument in shaping a greener, more responsible future for Southeast Asia and beyond. Let’s orchestrate a future where genuine sustainability takes center stage, and the curtain falls on greenwashing once and for all. Remember, the fight for authentic sustainability is an ongoing performance, and your voice is a vital instrument in shaping a brighter future.

     

     

  • Steering The Malaysia’s ESG Landscape

    As we step into 2024, let’s explore the evolving world of investing, where the buzz around ESG (Environmental, Social, and Governance) principles is gaining momentum. Malaysia is at the forefront, setting ambitious goals for carbon neutrality by 2050. Join us on a journey to discover practical tips for everyday investors to align their portfolios with responsible spending.

    MALAYSIA’S ESG PROGRESS

    Malaysia’s commitment to ESG is evident through its ambitious plans. The nation’s focus on renewable energy, sustainable cities, and a green economy showcases dedication to environmental stewardship. Keep a keen eye on these trends as they can significantly influence your portfolio’s performance.

    GREEN ENERGY AND SUSTAINABLE CITIES

    Major companies in Malaysia are actively adopting green energy, with local giants opting for electricity from renewable sources. Initiatives like the Green Electricity Tariff and the Net Energy Metering Nova program demonstrate a robust commitment to sustainable practices. To support these efforts, Malaysia incentivizes electric vehicles, targets 31% renewable energy in its capacity mix by 2025, and aims for carbon neutrality by 2050. Investors should consider the potential growth of companies aligning with these green initiatives.

    SUSTAINABLE FINANCING

    Malaysia stands out globally in sustainable financing, issuing the world’s first sovereign US-denominated sustainability sukuk. With a focus on eligible social and environmentally friendly projects, the government plans to issue up to RM10 billion of sustainable sukuk in Budget 2022. This move creates unique investment opportunities for those looking to support socially responsible projects. The PwC report on “ESG Deals Creation and Impact Investing in Malaysia” emphasizes how companies listed in FTSE4Good Bursa Malaysia (F4GBM) Index, demonstrating strong ESG business practices, have been able to deliver higher valuation multiples and investment returns.

    CORPORATE ESG PERFORMANCE

    Public-listed companies in Malaysia are outperforming in ESG metrics compared to their ASEAN counterparts. Ranking second on the MSCI All Country Index ESG Leaders Index, Malaysia’s companies demonstrate a commitment to sustainable practices. The FTSE4Good Bursa Index and the FTSE4Good Bursa Malaysia Shariah Index provide valuable insights into companies leading in ESG and Shariah-compliant solutions. Investors can leverage these indices to make informed decisions aligned with their values.

    SECURITIES COMMISSION INITIATIVES

    The Securities Commission (SC) Malaysia is taking significant steps to foster sustainable practices. The introduction of the Leading for Impact Programme and the Principles-Based SRI Taxonomy public consultation paper in 2021 are clear indications of Malaysia’s commitment to advancing ESG principles. The SC’s focus on sustainability risk management, disclosures, and the development of the sustainability index showcases Malaysia’s advanced stage in policy and regulatory actions related to ESG.

    BUDGET 2024: SHAPING THE FUTURE OF ESG

    Budget 2024 is a game-changer for the ESG space in Malaysia. Sustainability is now integrated into economic policies, reflecting the government’s commitment to making Malaysia an investment destination while achieving carbon neutrality by 2050. The budget allocates RM2 billion for the National Energy Transition Roadmap (NETR) and a RM200 million startup fund for the New Industrial Master Plan (NIMP) 2030, reinforcing Malaysia’s dedication to a low-carbon economy. A RM900 million loan fund for SMEs to enhance business productivity through automation and digitalization demonstrates a focus on long-term sustainability through resource optimization and waste reduction. Guarantee funds of up to RM20 billion for SME entrepreneurs, especially in the green economy, technology, and halal fields, further boost investor confidence. Putrajaya’s transformation into Malaysia’s low-carbon city, utilizing solar panels and electric vehicles, sets a benchmark for sustainability, influencing ESG from an investment category to a mainstream strategy.

    EXPERT INSIGHTS ON BUDGET 2024

    Experts highlight Budget 2024’s emphasis on promoting domestic direct investments and attracting venture capital for high-innovation start-ups and green growth. The allocation of funds towards Malaysia’s National Energy Transition Facility (NETF) and encouraging financial institutions to provide up to RM200 billion in financing fosters a favourable environment for foreign climate investors. The focus on green investments is expected to stimulate both local and foreign investments in the renewable energy sector, propelling Malaysia towards a low[1]carbon economy. This aligns with global trends where investments in low-carbon energy technology reached a record level of USD1.1 trillion in 2022.

    ENSURING LONG-TERM SUSTAINABILITY

    Budget 2024 takes mid-term steps to encourage sustainable economic instruments through tax exemptions and deductions up to 2027. This includes tax deductions for companies participating in the voluntary carbon market and increased funding for Ecological Fiscal Transfer for Biodiversity Conservation (EPT). The emphasis on impact investing, supported by tax exemptions for social enterprises, aligns with Malaysia’s goal of becoming a prominent regional SRI hub. These measures aim to drive long-term ESG programs and initiatives.

    BALANCING IMMEDIATE NEEDS AND FUTURE SUSTAINABILITY

    While Budget 2024 focuses on promoting investments into conservation and the transition to a low-carbon economy, there are concerns about capacity enhancement needs and legal infrastructural gaps. Awareness needs to be raised among SMEs about the importance of sound ESG management. The budget lays the groundwork for economic instruments to facilitate Malaysia’s transition towards a low-carbon economy, but there is room for a broader focus on ESG factors to ensure long-term success.

    BLOOMBERG FIRESIDE CHAT – MALAYSIA’S ESG ACCELERATION

    In a recent Bloomberg fireside chat, Muhamad Umar Swift, Bursa Malaysia’s CEO, discussed how COVID-19 has spurred ESG adoption in Asia. Umar shared insights into Malaysia’s sustainability journey, highlighting Bursa Malaysia’s ESG initiation in 2010 with a vision to be ASEAN’s leading sustainable marketplace. ESG evolution in ASEAN focuses on education and Bursa Malaysia’s role in setting ESG transparency standards. Attracting global assets is a priority, aligning with local sustainability mandates and exploring avenues for sustainable investment. Regulatory influences, inspired by the E.U.’s Taxonomy, play a crucial role in attracting capital. Looking forward, public awareness is key to fostering a positive cycle. Bursa Malaysia actively encourages sustainable investment, aspiring to embed ESG values into the broader culture and society.

    GLOBAL COMPARISON

    Compared to ESG-focused budgets in neighbouring countries, Malaysia’s Budget 2024 takes commendable steps. However, lessons from Australia and Singapore highlight the importance of waste management, community education programs, and industry regulation for cohesive ESG practices.

    PRACTICAL TIPS FOR EVERYDAY INVESTORS

    Now, let’s translate these developments into practical tips for everyday investors: 1. Diversify with ESG Funds: Consider allocating a portion of your portfolio to ESG-focused funds. These funds invest in companies meeting high ESG standards. 2. Stay Informed: Regularly check ESG ratings of companies in your portfolio. Websites like FTSE Russell ESG ratings can be valuable resources for this information. 3. Explore Sustainable Sukuk: Keep an eye on opportunities in sustainable sukuk. These investments not only provide financial returns but also contribute to socially and environmentally responsible projects. 4. Engage in Sustainable Initiatives: Support companies actively involved in green initiatives. As consumers, your choices can influence corporate behaviour. 5. Long-Term Vision: Remember, ESG investing is a journey, not a destination. Companies embracing sustainable practices today may offer long-term value.

    LOOKING AHEAD

    As Malaysia advances in its ESG journey, there are exciting prospects for responsible investors. The upcoming trends in energy transition, food security, circular economy, and mobility transformation offer avenues for sustainable investments. Keep an eye on these developments to stay ahead in the evolving landscape of responsible investing. In conclusion, ESG is not just a financial trend; it’s a collective effort to create a better future. As you navigate the world of investments, consider the impact your choices can have on the environment, society, and corporate governance. Together, let’s shape a future where responsible spending is not just a choice but a way of life. Happy investing!

    (Sources: Bloomberg, The Star, PwC)

    This story is a contribution from Sajesh Kumar Paramasivam – Senior Partner at TorchBearer Consulting, a wealth management company that specializes in family wealth building through expert guidance.

  • Invest Johor’s Vision Unveiled

    Invest Johor sets its sights on a future where the state stands as a prominent global player, extending its economic reach beyond traditional sectors to embrace new frontiers that will shape the global economic landscape in the coming decade. The focus of these efforts spans a diverse array of industries, ranging from technology and innovation hubs to renewable energy, biotechnology, logistics, tourism, and smart city development. The strategic intent is clear – Johor aims to create an economic landscape that not only attracts global investments but also nurtures sustainable and inclusive growth within the state.

    In the realm of technology and innovation, Johor is positioning itself to become a hub that attracts investments in research and development, technology parks, and startup incubators. The global push towards sustainability is not lost on Johor, as it actively seeks investments in renewable energy, emphasizing solar, wind, and other green technologies as significant drivers of economic growth. With advancements in biotechnology and an ageing global population, investments in healthcare and biotech industries, including research facilities and pharmaceutical manufacturing, are gaining prominence.

    The rise of e-commerce has reshaped supply chain dynamics, and Johor, with its well-developed logistics networks, is poised to attract investments in efficient logistics and distribution centres. Additionally, the state’s strategic location and natural attractions make it an attractive destination for tourism and hospitality investments, including hotels, resorts, and infrastructure development to support the burgeoning tourism industry.

    Education and training facilities are not overlooked in Johor’s economic vision. Recognizing the long-term benefits of a skilled workforce, the state is actively investing in universities, vocational training centres, and programs that align with emerging industries. The concept of smart cities, integrating technology to enhance the quality of life for residents, is also part of Johor’s forward-thinking approach, focusing on sustainability, connectivity, and efficient resource management.

    As technology continues to reshape the financial industry globally, Johor is not lagging. Investments in financial services and fintech are seen as drivers of economic growth, encompassing the establishment of fintech hubs, support for startups, and the adoption of digital financial solutions. Sustainable agriculture practices and agribusiness investments are also part of Johor’s strategy for economic diversification, involving precision farming, agro-processing, and the development of agricultural technology.

    However, the success of these visionary investments depends on various factors, including government policies, infrastructure development, regulatory frameworks, and the ability to attract and retain talent. Johor recognizes the need to create an environment that fosters innovation, collaboration, and sustainable practices to ensure the realization of its economic aspirations.

    “The concept of Invest Johor is rooted in creating a dynamic economic landscape that not only attracts investors but also nurtures sustainable and inclusive growth in the state.”

    Beyond the strategic economic initiatives, Invest Johor is keenly focused on leveraging the state’s rich heritage. From a historical gateway to a modern economic powerhouse, Johor’s journey reflects resilience and adaptation. Invest Johor places a strong emphasis on strategic infrastructure development, enhancing transportation networks, logistics hubs, and technology parks to attract businesses involved in cutting-edge industries.

    Facilitating collaboration between industries and creating specialized clusters is another strategy to enhance competitiveness. The idea is to build ecosystems where companies, research institutions, and startups can collaborate and benefit from each other’s expertise. To attract investments in disruptive technologies, Invest Johor, in collaboration with MIDA, offers targeted incentives for companies involved in sectors such as biotechnology, information technology, and advanced manufacturing. These incentives may include tax breaks, grants, and other financial incentives to encourage businesses to establish and expand their operations in Johor.

    Talent development and retention play a crucial role in sustaining Johor’s economic momentum. Invest Johor collaborates with Unit Modal Insan Negeri Johor to focus on developing and retaining a skilled workforce. This involves collaborating with educational institutions to ensure that the local workforce is equipped with the necessary skills for emerging industries. The establishment of training programs and partnerships with universities and vocational schools is part of this long-term vision.

    Digital transformation is recognized as a key driver for staying at the forefront of economic development. Invest Johor supports businesses in adopting digital transformation strategies, including e-commerce, Industry 4.0 technologies, and smart city initiatives. This commitment to embracing digital technologies aligns with the global trend towards Industry 4.0 and the increasing reliance on digital solutions across various sectors.

    Sustainable development is a core principle guiding Invest Johor’s initiatives. The organization actively promotes sustainable practices in industries such as renewable energy, eco-tourism, and green infrastructure development. This commitment aligns with the region’s dedication to responsible and future-oriented economic growth. The emphasis on sustainability reflects a global shift towards environmentally conscious practices and resonates with investors who prioritize Environmental, Social, and Governance (ESG) factors in their decision-making.

    Invest Johor’s efforts extend beyond economic growth to actively engaging with the younger generation and entrepreneurs. The emphasis on attracting young talent and fostering a thriving millennial ecosystem is seen as a critical component of Johor’s economic strategy. Concrete examples of successful initiatives and stories showcase how the state leverages the dynamism of the youth to fuel economic growth and innovation.

    The responsible investor of today prioritizes ESG factors, and Invest Johor recognizes this shift. The organization takes measures to ensure that development in Johor is sustainable and environmentally responsible. This includes prioritizing green infrastructure development, supporting renewable energy initiatives, and ensuring compliance with environmental regulations. The role of investors in contributing to a green and equitable future is highlighted, encouraging them to be part of the sustainability journey in Johor.

    Johor’s embrace of disruptive technologies like AI and biotech positions it as an attractive destination for global tech giants and innovative startups. The article highlights some of the most exciting tech-driven projects or initiatives that are drawing attention from the global tech community. It also provides insights into how investors can contribute to building Johor’s tech ecosystem and harness its potential for future growth.

    The human element is not overlooked in this economic narrative. Real-life success stories of local entrepreneurs and foreign investors who found their dreams and profits in Johor are shared. These stories serve to resonate with readers, offering tangible examples of the opportunities and support provided by Invest Johor. The inclusion of investors’ testimonial videos adds a personal touch to the narrative, bringing the success stories to life.

    Invest Johor’s commitment to “Building a Better Johor Together” emphasizes active engagement with local communities. The organization recognizes the importance of inclusive and equitable growth, and this involves understanding the unique needs, challenges, and aspirations of the local community. The article provides insights into how investors can actively engage with local communities, building partnerships, measuring, and reporting impact, seeking input and feedback, and committing to long-term collaboration.

    To differentiate itself from other regional investment hubs like Singapore or Vietnam, Invest Johor leverages specific strengths, advantages, and strategic initiatives. The strategic location and connectivity of Johor, particularly its proximity to Singapore, provide a significant advantage. The focus on enhancing transportation and logistics infrastructure enhances connectivity and facilitates the movement of goods and people. Cost-competitiveness is highlighted as a key proposition, with lower operational costs compared to Singapore being an attractive factor for investors.

    Invest Johor further distinguishes itself through the development of special economic zones and industrial parks with tailored incentives for specific industries. The organization promotes a diversified approach, highlighting specific industries or sectors where Johor has a competitive advantage or is experiencing rapid growth. The focus on innovation and technology, with the promotion of research and development centres, technology parks, and partnerships with tech-focused organizations, positions Johor as a forward-thinking investment destination.

    “Johor’s economic strength lies in its strategic location, cost-competitiveness, and a diversified approach to industries. We envision a future where Johor stands out as a hub for innovation, sustainability, and vibrant economic activity, contributing significantly to Malaysia’s overall growth.”

    Sustainable development and a commitment to ESG factors are emphasized as differentiators for Johor. The integration of sustainable practices, including green infrastructure, renewable energy initiatives, and compliance with environmental regulations, aligns with the global trend towards responsible business practices. The ease of doing business and a supportive regulatory environment, along with a skilled workforce and education initiatives, are additional factors that contribute to Johor’s appeal as an investment destination.

    Looking ahead, Invest Johor envisions bold and audacious possibilities for Johor’s economic landscape in the next 5-10 years. While predicting the future is inherently challenging, envisioning transformative trends involves considering visionary scenarios. These include the emergence of Johor as a global innovation hub, a sustainable smart city with green infrastructure, a biotech and healthcare hub, a pioneer in renewable energy, a digital transformation epicentre, a global logistics and trade hub, a cultural and creative economy hub, and an integrated sustainable tourism destination.

    To prepare for disruptions and unexpected developments, Invest Johor outlines strategic measures to ensure adaptability and resilience. These include scenario planning, diversification of industries, maintaining an agile policy framework, investment in education and skills, international collaboration, digital infrastructure resilience, community engagement, environmental stewardship, crisis preparedness and response, and regular stakeholder consultation.

    Invest Johor’s vision for the future is comprehensive, spanning a diverse range of industries and focusing on sustainability, innovation, and inclusivity. The organization’s strategic initiatives and collaborative approach position Johor as a dynamic and forward-thinking investment destination. As the state navigates the complexities of a changing global landscape, Invest Johor remains committed to building a better future for Johor and contributing significantly to Malaysia’s overall economic growth.

  • ESG Evolution: COP27 to Carbon Stocks Insights

    In an era defined by mounting environmental concerns, social responsibility, and ethical governance, the rise of Environmental, Social, and Governance (ESG) principles has been nothing short of transformative. As the world grapples with the urgent need to address climate change and promote sustainable practices, ESG has emerged as a critical framework guiding both businesses and governments towards a greener and more equitable future.

    THE GENESIS OF ESG: PAVING THE PATH TO COP27
    The inception of ESG can be traced back to the mounting awareness about the consequences of unchecked environmental degradation and social inequality. ESG’s roots lie in the early sustainability movements that championed the need for responsible business practices, community engagement, and ethical corporate governance. At COP27, the trajectory reached a significant milestone, where nations congregated to address the accelerating climate crisis. COP27 heralded a renewed commitment to curbing greenhouse gas emissions, with a growing emphasis on collaborative global eff orts. This conference placed ESG’s relevance on the international stage, with environmental stewardship, social equity, and transparent governance at the forefront of policy discussions.

    ESG INTEGRATION IN MALAYSIAN BUSINESSES
    ESG’s imprint extends far beyond policy considerations, effectively permeating and reshaping the
    entire business landscape in Malaysia. Companies of all scales, ranging from industry giants to small enterprises, have astutely recognised that embracing and integrating ESG practices goes beyond aligning with global imperatives—it becomes a strategic decision that significantly influences
    brand reputation, financial performance, and long-term sustainability.

    In a study conducted by the Malaysia Institute for Supply Chain Innovation, it was revealed that businesses that prioritise ESG principles tend to outperform their peers in terms of financial performance. Notably, companies that demonstrated robust environmental and social practices experienced an average of 25% higher return on equity (ROE) compared to their counterparts who did not prioritise ESG considerations.

    Furthermore, a survey conducted by the Malaysia Business Ethics Institute (MBEI) disclosed that over 80% of consumers in Malaysia consider a company’s commitment to environmental and social responsibility when making purchasing decisions. This consumer sentiment highlights the pivotal role ESG plays in shaping brand perception and influencing consumer choices.

    Large corporations in Malaysia, such as Petronas, have proactively integrated ESG into their business strategies. Petronas’ initiatives to reduce carbon emissions through energy-efficient practices not only contribute to environmental goals but have also resulted in significant cost savings. The company’s investments in renewable energy and sustainable technology have not only earned it recognition as a responsible corporate citizen but have also attracted eco-conscious investors.

    In the realm of small and medium-sized enterprises (SMEs), a survey by the Sustainable Energy Development Authority Malaysia (SEDA) unveiled that over 70% of SMEs are actively seeking to enhance energy efficiency and adopt cleaner technologies. These efforts not only reduce the carbon footprint but also position SMEs as forward-thinking entities aligned with global sustainability trends.

    The Malaysian government’s efforts to incentivise ESG practices have also bolstered the integration of these principles. The introduction of tax incentives and grants for businesses engaged in eco-friendly
    initiatives has garnered increased interest and engagement from the corporate sector. This intersection of government support and business initiative demonstrates the growing recognition of ESG’s impact on
    long-term profitability.

    In essence, ESG integration in Malaysia transcends being a superficial trend, resonating deeply with both consumer preferences and financial realities. The data and statistics outlined above indicate that companies embracing ESG practices are not only meeting global ethical standards but are also carving a competitive edge in the market. As businesses continue to navigate an ever-evolving landscape, the significance of ESG in enhancing brand reputation, financial performance, and overall sustainability becomes irrefutable.

    MALAYSIA’S ESG JOURNEY: A PARADIGM SHIFT FOR SUSTAINABILITY
    Malaysia’s stride towards COP27 was marked by a series of proactive measures to align its policies and industries with ESG principles. A notable endeavour was the launch of the Bursa Carbon Exchange (BCX), Malaysia’s voluntary carbon market exchange. BCX not only embodies the nation’s commitment to net-zero emissions by 2050 but also symbolises Malaysia’s emergence as a key player in the global carbon credit ecosystem.

    According to Tan Sri Abdul Wahid Omar, Chairman of Bursa Malaysia Berhad, “The launch of Bursa Carbon Exchange is momentous as it will play a significant role in supporting the nation’s, and indeed the world’s, voluntary carbon market ecosystem.” This initiative positions Malaysia at the forefront of sustainable finance, marrying its role as a global Islamic financial marketplace with innovative carbon credit offerings.

    INVESTING IN CARBON STOCKS: NAVIGATING PROFITABLE SUSTAINABILITY
    Investing in carbon stocks has emerged as a compelling avenue for both environmentally conscious investors and those seeking lucrative opportunities. As the global drive towards sustainability gains momentum, carbon stocks present a unique convergence of responsible investing and financial growth. These stocks offer investors the chance to not only contribute to carbon reduction initiatives but also to reap potential financial rewards. Below, we delve into the top-performing carbon stocks of 2023 that exemplify the blend of sustainability and profitability.

    1. Carbon Streaming Corporation (NETZ.NEO and OFSTF.OTC)
    Carbon Streaming Corporation stands as a trailblazer in the carbon credit landscape, focusing on offset credits and securing high-quality carbon credits due to its early-mover advantage. Trading on the
    NEO exchange in Canada and the OTC market in the U.S., the company’s vision extends to listing on the NASDAQ in the near future. Analysts from institutions like TD, Bank of Nova Scotia, BMO, and H.C. Wainwright have endorsed Carbon Streaming’s potential, with an average price target of around US$4.50. Carbon Streaming’s strategic approach highlights its role as a leveraged play on the increasing demand and value of carbon credits within the voluntary carbon market.

    2. DevvStream (DESG.NEO)
    DevvStream, a new entrant in the arena, offers financing for green projects in exchange for carbon credit rights. Partnering with its parent company, Devvio, DevvStream leverages an advanced blockchain-based ESG platform. This B2B service provides a framework for global-scale enterprise management, ensuring regulatory-compliant transaction management, ESG reporting, and recordkeeping. DevvStream’s unique positioning within the ESG ecosystem makes it a compelling player with access to an expanding market.

    3. Base Carbon (BCBN.NEO)
    Base Carbon, akin to Carbon Streaming Corp., channels its efforts into financing carbon projects generating voluntary carbon credits. The company’s executed project agreements are poised to generate an estimated 34 million carbon credits, equivalent to approximately 3 million tonnes annually at full production. With a commitment of US$29.6 million for projects in Rwanda and Vietnam, Base Carbon tackles household energy inefficiencies through initiatives like fuel-efficient cookstoves and safe-drinking water purifiers. The company’s robust balance sheet, strong cash position, and strategic partnerships position it favourably for the projected growth in the voluntary carbon market.

    4. Brookfield Renewable Partners (BEP)
    Brookfield Renewable Partners stands out as a global leader in renewable energy and decarbonisation technologies. With an exclusive focus on clean energy, BEP’s portfolio comprises hydroelectric plants, wind farms, solar power plants, and other sustainable energy solutions. Their development pipeline, targeting a 46% increase in power capacity over three years, showcases their dedication to renewable expansion. BEP’s proven track record, stable business model, and extensive global presence make it a go-to choice for investors seeking exposure to carbon markets. With a strong dividend yield, consistent growth in distributions, and an emphasis on clean energy, BEP aligns seamlessly with the growing trend toward responsible investing.

    CARBON STOCKS ARE PAVING THE WAY TO A SUSTAINABLE FUTURE
    As more and more public companies declare their net-zero ambitions and disclose their carbon emissions, responsible investing is becoming a hot topic in financial markets. Big money is pouring into renewable energy and offsetting emissions using carbon credits. Meta, Apple, and Netflix are among the tech giants leading the charge towards net-zero targets by 2030. Meanwhile, major mining companies
    like Barrick and Newmont, as well as energy giants like Saudi Aramco, Exxon, and Shell, are also making similar commitments.

    These developments will likely increase investor interest in all things carbon-related in 2023 and beyond. And as 2030 draw closer, we can expect this trend to accelerate even further. Carbon stocks could prove a valuable addition to an investor’s portfolio as the world heads towards net-zero targets.

    ANTICIPATING COP28 AND BEYOND: A SUSTAINABLE TRAJECTORY
    As COP28 approaches, the world is poised to build upon the achievements of COP27. The momentum created by ESG initiatives, including the rise of carbon stocks, will likely shape discussions and actions at COP28. The success of these endeavours hinges on the concerted efforts of governments, businesses, and individuals to embrace ESG as an integral part of their strategies.

    The evolution of ESG from a concept to a driving force shaping sustainability and responsible governance is painting a promising picture of a world that acknowledges its responsibilities. With that, it is also taking proactive steps towards a greener, more equitable future.