Category: sustainability

8 In 10 Malaysians Are Alarmed & Concerned About Climate Change In Malaysia
Right now, world leaders, climate scientists, and policymakers from across the globe are in Sharm El Sheikh, Egypt, for the Conference of Parties (COP 27). This is the largest climate change conference in the world, and it coincides with a Monash University Malaysia survey led by Dr Azliyana Azhari from the Monash Climate Change Communication Research Hub (MCCCRH) that has shown that 8 in 10 Malaysians are either alarmed or concerned about climate change.

This survey is the first of its kind in Malaysia and saw over 1000 respondents. According to Dr Azhari the “survey aims to gauge Malaysia’s public perception and understanding on climate change and climate change impacts, alongside understanding the Malaysian audience’s behavioural responses towards climate change issues.”

Dr Azliyana Azhari, Monash Climate Change Communication Research Hub (MCCCRH)

Here’s what the takeaway messages are about what the Malaysian public knows about climate change and climate action. According to the survey, 97% of Malaysians are aware of climate change and understand it is happening. 82% know that human activities cause climate change. 32% believe climate change is presently causing harm to our daily lives, and 35% believe that climate change will cause harm to the Malaysian population within the next decade.

The survey also noted individual actions and the willingness to change.
- 65% bring their own shopping bags when buying groceries.
- 63% have switched to environmentally friendly products.
- 79% turn off electrical appliances and lights when not in use to reduce home energy.
- The most common waste management behaviours are recycling (67%) and not openly burning trash (68%).
The behaviours with the most significant proportion of people open to change are taking part in an environmental/climate change campaign (63% would like to or are planning to do this), installing household solar hot water or panels (79% would like to or are planning to do this), and composting kitchen waste (51% would like to or are planning to do this).

With the growing occurrence of extreme weather events resulting from climate change, such as storms, floods, and droughts, at least 60% of Malaysians say that they have been affected directly or indirectly by these events, which leads to affecting their daily lives, health and economic well-being. It is not surprising that Malaysians are getting concerned and alarmed. These findings are stark and timely as the Malaysian delegation meets world leaders at COP 27 to work towards the reduction of Malaysia’s carbon emissions.

About Monash University Malaysia

Established in 1998, Monash University Malaysia is the third-largest campus of Australia’s largest University and the first foreign university campus in Malaysia. Monash University is a premier research-intensive Australian University ranked 44th in the world by the prestigious Times Higher education World University Rankings 2023. A self-accrediting university, the campus offers a distinctly international and culturally rich environment with approximately 9,400 students from 78 different countries.

Monash Climate Change Communication Research Node

The Monash Climate Change Communication Research Hub (MCCCRH) Malaysia Node was established in 2021. It is led by the School of Arts and Social Sciences (SASS) at Monash University Malaysia in collaboration with the Monash Climate Change Communication Research Hub (MCCCRH). It is dedicated to researching climate communications in Southeast Asia. The node brings together expertise in SASS with collaborators in the School of Science in Malaysia campus and the existing team in MCCCRH.
14/11/2022
Why The Best Investment On Earth Is Earth Itself?

Raw land is a “Hands-off” investment. In fact, land is the ‘raw material’ for just about every property development. As a budding investor, you need to know just what kind of land is needed for an upcoming project:

Is it the right size? The project may not be big enough to meet demand around the area. The individual unit size may or may not meet the demands of the demographic it is attempting to serve.

Is it the right type? Is the land fit for agricultural projects, or is it better suited for industrial ones? Are there any environmental factors that may hinder project growth? If it’s a residential project, does it connect well with surrounding facilities (public transport, hospitals, etc)?

Buying land is usually significantly cheaper while it is underdeveloped than land that has a useable structure constructed on it. It is clear that land is the raw material of any property development. Thus, the saying “the best investment on earth is earth (land)”.

Might be a good read : 4 Tips To Invest For Long Term

Land is always a scarce resource as it is non-produceable. Hence, developers are constantly on the lookout to increase their land banks.

Acquiring the right type of land (agriculture, industrial, residential, commercial, etc) and the right size (density, plot ratio, type of usage and development, individual unit size, etc) will ultimately help decide the potential value of the land.

Right Location?

Is it at the right location? The area could already be matured, which could lead to a steady interest. If it’s an upcoming developing location, there may be a spike in valuation over time.

Our strategy includes land acquisition for property development in Hong Kong (HK), probably one of the most challenging markets in the world. Population density, land scarcity, and off-the-charts growth make it an extremely complex one.

However, we have managed to gain a foothold with a strategy of land bank acquisition, i.e., acquiring small tracts of land with an eye to future development, taking into consideration the political, social, environmental and cultural realities of HK.

When we were first introduced to land acquisition opportunity in HK, we felt excited to explore more and eventually got involved due to HK properties which are ranked among the most expensive in the world. And with land scarcity, it all boils down to capitalising on demand and supply.

Below are some key indicators that will be used to decide if the stipulated land will be suitable for this strategy.

As a rule of thumb: Islands with scarce build-able land and high population density with high PPP or FDI will never go wrong.

Please keep in mind the information below is an example to help you understand details on a new level and I would like to remind you that every opportunity is different. You must always do your own research before you commit anything.

Location, Political System And Economy

With a landmass of 1,104km² and a population of over seven million people, HK is one of the most densely populated areas in the world. As of 2018, HK’s gross national income (GNI) per capita is US$67,810 Purchasing Power Parity (PPP) dollars and its gross domestic product (GDP) per capita is US$64,597 PPP, according to the World Bank.

Under the principle of “One Country, Two Systems”, HK has a different political system from mainland China. The law of HK is based on the rule of law and the independence of the judiciary where the constitutional framework is provided by the HK Basic Law.

The Lands Department in HK is practicing the British system, which is common law and familiar to us when we invest.

Hong Kong has a free market economy and it is highly dependent on international trade and finance.

Alternative To Land Acquisition

One of the alternative proposals to land acquisition is leasing the land from landowners for a certain lease period. Leasing land may also support sustainable project development since the lands need to be returned to the landowners at the end of the lease period in a condition similar to its original form without considerable environmental degradation.

When the land is leased then anybody who has to otherwise give up land or livelihood will be compensated for its growing valuation over time. In this model, the landowner lends her land to the government for a steadily-increasing rent, or through an annuity-based system.

In any case, how do we contrast this with what we are doing in Malaysia?

Despite having already established viable businesses in more than 10 countries, and being able to show healthy profits in most of them, I am still bullish about the place I call as home. I believe there are many areas where both local and foreign investors can invest their funds for very healthy returns on investment.

We tend to believe that we need a lot of money to invest, but it’s not always true. But it can be done.

You have to be able to make different kinds of investment, like investing time in doing proper research and learning about markets, that will help you make well-informed decisions and taking a calculated risk. Be consistent. Your attitude towards small things should be the same as your attitude towards big ones.

Some “good” and “bad” qualities vary from one community to another. If the investor knows the local community, they could know better which parts of the land or town are less or more desirable.

It is always smart to rent in a new community before committing to purchase a land for investment. Sometimes, renting allows the investor to become familiar with the location.

“Location, Location, Location” Makes All The Difference

“If you are avalanched by adversity, hold on. Don’t give up; rebuild. Make decisions and stick to them.”

About the Author

Max Shangkar is group CEO of Max Capital Management Holding Ltd and an expert in global project management consultancy. He is also the author of the best-selling book Investment Strategies for Global Real Estate.

He propounded the market-proven investment strategies of Property Investment Life Cycle and Business Investment Life Cycle that educated over 6,000 Global Investment Community members to invest in property projects and businesses in over 10 countries.

15/06/2022
Wisdom Of Investing In Passive Environmental Design

Our KL Petronas Towers do not even feature in the top 10 tallest buildings in the world today (Well, maybe Merdeka 118 is on the list now). The Burj Khalifa, at 828m, which sits in the 2 sq km Downtown Dubai Development holds the current highest record.

Most of these ultra modern glistening towers comes with a massive urban township development. The Jeddah Tower, which is on hold currently, is threatening to be the next tallest surpassing 1km in height.

These large developments hundreds of acres in size involves high finances, entrepreneurship and high technology. All of it carries a heavy physical demand on the land it sits on to cater to the desired lifestyle. High technology is then sold as the solution to meet these modern lifestyles boasting of innovation where there is a control for everything from climate to commode.

This is a sign of the times we live in – where there is a headlong rush into this technological frenzy which is then touted as being green and environmentally friendly. There are even brownie points given for technology promoted in green buildings.

However, there has not been enough consideration of the impact of producing these man-made products. Some of these materials are potentially hazardous and unwittingly, we are increasing the consumption of these resources. So the costs of making green buildings may not be so green after all.

We are unfamiliar with substances like tetrachloride, cadmium telluride, or flourinated hydrocarbon. Some of these toxic materials used in building technology products are yet to be fully ascertained on its long term environmental impact.

Also, all technology products have a lifespan and it is getting shorter as the technology itself changes. In many instances, the reliance on technology demands active energy to maintain a comfortable living environment.

These are the running costs involved, not to mention replacement costs which is all great for the tech business but not so for a sustainable lifestyle. We need to revisit our senses and sensibility on the possible over reliance on technology.

Harnesting The Earth’s Energy

Alternatively, consider this, we can draw from nature by responding to reproduce the natural passive environment by harnessing the earth’s energy for an urban solution. For instance, mimic nature and create a green canopy cover to provide shade.

Shading under a tree provides protection to shield against the harsh tropical sun and how remarkably comfortable and safe it feels like a sensation. These shading over the exposed hard road and structural surface areas will minimize and reduce heat gain, which reduces further warming in the tropical heat.

The ancient Chinese practice of practical Feng Shui, not the mystical one, has a lot of environmental wisdom in carefully positioning the built form on the land as a response to nature. Orientate the built form to be sensitive to the microclimate to draw the prevailing wind into the created spaces. The system relies on the wind to force exterior air already cool under the green canopies into the building.

It uses the differential air pressures to be directed as cross ventilation. This wind cooled form harnesses the dynamics of natural air flow to mimic a condition similar to resting below a tree canopy. The practical significance is to replace air conditioned spaces with natural ventilation and less energy is required to cool the ones that has less heat gain.

Natural lighting is another fundamental consideration in passive environmental design. The shading must not be misunderstood as the omission of sunlight but the direct light and glare redirection. Natural light has an emotional and therapeutic feel-good effect on human beings. Designs that allow natural light to permeate the spaces create a desirable habitable environment. It will eliminate the need for artificial lighting.

The default mode of reliance on technology has allowed too many deep sterile and practical spaces to exist—many of these spaces house working people who psychologically do not know if it’s night or day.

Do Not Idolise Technology

The natural environment is a greater ally if you harness its natural potential. Do not idolize technology to dominate your mindset. There is a place where technology does matter when it does more good than bad. Technology is there to supplement and facilitate. No greenhouse gas emissions are released into the atmosphere when solar power is used to create electricity.

Converting waste into power generation is another worthy technological advancement which will reduce the by product of the urban lifestyles. Electric transport systems supplanting fuel cars within urban developments also reduce fuel consumption and carbon emission.

The passive environmental design prioritizes the optimization of nature’s forces over our human determination to compel the physical environment to bend to our will. When we learn to work with nature, we run faster because the background can look after itself better.

Empty your mind, be formless, shapeless – be like water.

The legendary Bruce Lee had quoted with the wisdom of the oriental martial arts.

It is a philosophy to borrow someone else’s energy to work in your favor. It would help if you took your mind to understand how to yield to the forces of the natural environment to work for you. If you invest wisely, you create a living environment that draws from nature to cost you less.

About the author

Ng Wai Keong is the principal director of NWKA Architects Sdn Bhd, a boutique architectural design house which focuses on his passion to conceptualise the idea that success is a process of design excellence.

31/05/2022
ESG Resilience: Is Green the New Gold?

As the COVID-19 pandemic continues to dampen financial markets, funds with Environmental, Social and Governance (ESG) strategies have seen their fortunes rise.

In fact, major ESG funds have outperformed classic indices like the S&P 500 during the first weeks of the pandemic, and several ESG funds were able to soften the blow to loss in value as compared to standard non-ESG benchmarks.

This is bolstered by the fact that worldwide investors had poured US$45.6 bil into ESG funds in the first quarter of 2020 as compared to outflows of US$384.7 bil for the overall fund universe, according to research firm Morningstar.

To capitalise on this growing demand for ESG funds, Affin Hwang Asset Management Bhd recently unveiled the Affin Hwang World Series – Global Sustainability Fund (the fund). Launched on 14 September, it feeds into the Allianz Global Sustainability Fund (Target Fund).

As a feeder fund, it will invest at least 80% of its net asset value (NAV) into its collaborating partner’s Allianz Global Sustainability Fund with the remaining 20% of its NAV into money market instruments, deposits and/or cash. The Target Fund is a Luxembourg domiciled fund managed by Allianz Global Investors.

For context, ESG funds are portfolios of equities and/or bonds for which environmental, social and governance factors have been integrated into the investment process.

Changing Demographics and Trends

Affin Hwang Asset Management chief marketing & distribution officer Chan Ai Mei says the new ESG fund provides an avenue for investors to buy into global quality stocks with sustainable growth, whilst investing according to their own principles and beliefs.

“Changing demographics and trends, coupled with the unprecedented impact of the Covid-19 pandemic, have only accelerated the adoption of ESG by both businesses and the investing community in their decision-making.

“Our belief is that good governance ultimately leads to better financial performance, with industry research showing positive correlation between ESG and stronger returns over the long-term,” Chan adds.

The base currency of the fund is the US dollar. The fund is offered in four currency classes, namely USD Class, MYR-Hedged Class, SGD-Hedged Class and AUD Hedged-Class. The minimum investment amount is $5,000 for all listed currency classes.

Commenting on how the ESG space has fared in the aftermath of the coronavirus-related financial crisis, Allianz Global Sustainability Fund lead portfolio manager Paul Schofield says the pandemic in and of itself may not have huge issues on ESG investing. Rather, it may highlight some areas and downplay others.

“The trend for ESG has long been established and has been increasing year on year. ESG is just one tool in the toolbox that investors may use when analysing companies. We do not believe Covid-19 will change that; the trend was already in place and it is only going one way,” he tells Smart Investor.

“I have been told again and again by people on the other side of the table that ‘ESG is a bull market phenomenon’ and ‘no one will care when markets are under stress’. Hence, the year 2020 has certainly been a good opportunity to test those theories!”

Shifting the Focus to ESG

Despite the existing trends surrounding ESG investing, there is no doubt that the focus has shifted a little in the face of the pandemic.

According to Schofield, the governance element of ESG was always the easiest one to talk about, as everyone understood this and was comfortable that good corporate governance is a ‘good thing’.

However, in the past few years, the clear focus of ESG was the ‘E’ – the environmental benefits. In particular, climate change was the area that clients had a particular connection with. The ‘S’ – the social part of the equation – has always been the difficult one to discuss with people, and the pandemic has helped to highlight some of the social factors a little more, he adds.

“The need to get the economy back and firing means working conditions, for example, will need to be managed closely all around the world. Companies will have to convince its employees, trade unions and regulators that workers will be kept safe.

“This will be much discussed going forward, and topics will include healthcare, access to medicine, education, and health and safety – all of which were areas that were less discussed pre-pandemic,” Schofield explains.

The Investment Strategy

The Allianz Global Sustainability strategy invests in a diversified mix of companies on the global stock market that aims to generate long-term out-performance and a positive, measurable impact on society.

The investment process is a collaborative effort consisting of four stages: SRI Ratings; Idea Generation; Team Stock Selection; and Portfolio Construction.

The strategy takes a ‘Best in Class’ approach to SRI, seeking to own companies which outperform sector peers on ESG criteria. ESG performance is assessed using AllianzGI’s proprietary SRI Ratings model.

The strategy also aims to avoid stocks with reputational risks, excluding stocks with significant revenues from coal, tobacco, alcohol, weapons, gambling and/or pornography.

The model ranks stocks as Best in Class, Average or Worst in Class. Thereafter, using bottom-up fundamental analysis, the portfolio managers construct a concentrated, diversified and long-only portfolio of c.50 stocks with superior financial and ESG performance.

The team analyses all potential investments from the bottom up, considering stocks in terms of their quality, growth and valuation characteristics. The focus is on high quality companies generating returns sustainably above the cost of capital, with a clear growth trajectory, on reasonable valuations.

These stocks tend to be excellent franchises, operating in sectors with low competitive intensity and high barriers to entry. The valuation discipline is based on reverse discounted cash-flow analysis.

“The strategy invests primarily (at least 75% of portfolios) in companies that are considered ‘Best in Class’ according to our SRI ratings. It can also invest up to 25% of the portfolio in ‘Average’ rated stocks that have demonstrated a commitment to improving ESG performance,” explains Schofield.

This flexibility incentivises the portfolio managers to engage with investee company managements to press for continued ESG improvements.

“We believe that superior ESG performance may ultimately translate into share price appreciation. As a result, this mechanism is an important source of alpha for the strategy, as well as positive, societal impact. The strategy cannot hold any worst-in-class rated names.”

By Bernie Yeo

This article was first published in the November-December 2020 issue of Smart Investor.

18/02/2021