From property through to telecommunications, business leaders convened at the recent Malaysia Climate Action Week to discuss how Environment, Social, and Governance (ESG) elements will play a critical role in producing long-term value for business resilience.

In his opening remarks, Stuart Milne, Group General Manager and Chief Executive Officer of HSBC Malaysia said, “We already see global multinationals incorporating sustainability analysis into their decisions on supply chains and location of manufacturing facilities. It won’t be long before regulators in the European Union (EU) and the U.S. require carbon footprint to be disclosed on product labels.”

HSBC Bank Malaysia was a key sponsor and partner of the event, which was co-hosted by the British Malaysian Chamber of Commerce (BMCC) and the British High Commission of Malaysia.

Speaking on the bank’s ambitious initiative called Project Cocoon, Raja Amir Shah, Chief Executive Officer of HSBC Amanah Malaysia Berhad shared, “Project Cocoon is a 24-month highly ambitious plan, where we are looking to convert our Malaysia specific operations, HSBC Amanah, into a fully sustainable bank by 2022.”

“Now, what does a fully sustainable entity mean? Or rather, how is it measured? So, what we have taken as a benchmark of measure is our financing portfolio and we are undertaking an exercise where we will be classifying our portfolio to be in compliance with the triple bottom line, as published by Bank Negara and the value based intermediation. So looking at people, prosperity, and planet, with 51% of our portfolio aligned with that by the end of 2022,” said Raja Amir.

Sime Darby, one of Malaysia’s pioneering home builders in Malaysia, elaborated on the value of ‘people’ under its ESG elements. The master builder claims to have built over 100,000 homes in the country and developed some of the earliest townships in urban Klang Valley such as Subang Jaya.

“The first thing is we want to work with communities. We’ve seen this deliver a heavy impact. We had a project where we worked on urban farms within our townships to establish a system to get fresh produce, so people didn’t need to travel very far. We worked on community recycling, which was very well received. This is not just asking vendors to recycle, but actually engaging residents actively to participate,” said Dato’ Azmir Merican, Group Managing Director of Sime Darby Property Berhad.

ESG is an area that is continuously evolving, with no one-size-fits-all solution for the world. What is clear is that every business will need to adapt smartly, analysing areas to champion – whether it relates to people, planet, or prosperity.

Adding to its ‘planet’-focused arm, Dato’ Azmir said, “The second area we aim to have impact on is biodiversity. To be a property developer, we have to be honest, it is not really sustainable. We cut down trees and build homes. But we have to get around this. How? One great effort that produces results is education. For example, our Rainforest Knowledge Centre in our Elmina development. We also work with NGOs at the Tropical Rainforest and Conservation Research Centre (TRCRC). We cultivate nurseries, we run programmes that children understand and appreciate biodiversity.”

While circular economy and biodiversity programmes can help offset emissions, the real value lies in the prevention, or reduction of emissions in the first place. In Malaysia, some of the largest contributors to emissions have already begun shifting business models to remain relevant. Part of that is implementing decarbonisation measures across the value chain, which can require an overhaul of operations.

“Today, if you look at our own operations, the biggest emission is diesel emissions, for example, for when we do earthworks. Personally, I believe that behaviours change when you make data available to people. I call it the Prius effect. When the Toyota Prius came out, drivers actually modified their behaviour when they saw how efficient they were driving. So for us, showing our truck or tractor drivers how they are consuming diesel is something that we’re looking at. Of course, we’re also looking at converting some of our assets to using renewable energy,” said Dato’ Azmir.

Driving greater energy efficiency was an approach echoed by Datuk Kamal Khalid, Chief Corporate & Transformation Officer of Celcom Axiata Berhad. “Our biggest source of carbon footprint is our hardware. Our network, our towers, our core that comes collectively accounts for about 75% of our global emissions. So the challenge is the adoption of more renewable energy, especially for the parts of our business, and then driving better energy efficiency.”

According to Datuk Kamal, the telecommunication sector accounts for just 0.7-0.8% of total carbon emissions globally, a third of the larger ICT (Information and Communications Technology) industry’s 2-3% emissions count. However, no business is too small to play its part.

“If you look at it as part of a broader value chain, the magnitude of the problem becomes much, much larger. The biggest single source of emissions across the industry is actually the lifecycle of devices that people use that are connected to our network. So that’s something that needs to be tackled holistically,” said Datuk Kamal.

ESG is an area that is continuously evolving, with no one-size-fits-all solution for the world. What is clear is that every business will need to adapt smartly, analysing areas to champion – whether it relates to people, planet, or prosperity.