ESG practices key to long-term sustainability
Malaysian firms that do not keep up with environmental, social and governance (ESG) requirements will lose out on contracts and investment opportunities, said panellists at an ESG discussion organised by the Malaysian Investment Development Authority.
“Any business that thinks ESG is a marketing gimmick and not taking proactive action on adopting ESG will become dinosaurs and eventually become obsolete,” said Patrick Tay, PwC Malaysia’s economics and policy deals partner, reports The Business Times.
This will also affect investments a company can attract. Investors are reviewing their portfolio and avoiding investments in companies that are not participating in sustainable activities, said Tay.
“According to Investopedia’s survey in 2021, 67% of respondents have expressed interest to buy more shares of ESG-focused companies,” he said, highlighting that this may not purely be for the good of the environment, but to protect their investments from ESG-related risks.
Shanta Helena Dwarkasing, programme director at United Nations Global Compact (UNGC) Malaysia and Brunei, also urged SMEs that are looking at expanding their business or exporting their products to start adopting ESG strategy, as close to 70% of Malaysia’s exports are to countries that have announced net-zero commitments.