ESG adoption is on the rise , fuelled by client demand and a desire to make an impact . As ESG momentum continues to gain steam , investors are refining and evolving their strategies . The demand from investors for more ESG transparency and accountability , together with regulatory changes around the world , creates a broad range of challenges .
Bursa Malaysia ESG Reporting Platform
Bursa Malaysia Securities Bhd on December 2023 unveiled the Bursa Malaysia ESG Reporting Platform , which will act as a repository for disclosures conforming to the prescribed format mandated under Bursa Malaysia ’ s enhanced sustainability reporting requirements introduced on September 26 , 2022 . According to its chief regulatory officer , this puts our listed issuers in good stead as Malaysia raises the bar for more robust ESG disclosures over the next few years .
Malaysia ’ s NDC
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Environmental , Social , Governance ( ESG )
By Pang Soo Mooi
The Malaysian Government announced in June 2023 that it is determined to be well-positioned to play its part in reducing emissions while ensuring that it is ready for the growth of the low-carbon economy .
For that , Malaysia has revised its Nationally Determined Contribution ( NDC ) to reduce the intensity of greenhouse gas emissions by 45 % by 2030 compared to 2005 levels , as part of the nation ’ s responsibility towards overall global climate targets .
The efforts towards achieving Malaysia ’ s NDCs have been incorporated into the 12 th Malaysia Plan and the National Energy Policy 2022 – 2040 ( NEP 2040 ). This policy document strategically charts the way forward and outlines key priorities for the energy sector in the coming years .
It positions the energy sector as a key catalyst for socio-economic development , and its progressive Low Carbon Nation Aspiration will ensure that the Malaysian economy is able to capitalise on opportunities arising from the energy transition to remain resilient and sustainable .
ESG Global Study – Harvard School
ESG integration remains the top implementation strategy , showing how investors are taking a holistic approach as they look to comprehensively embed ESG into the investment process .
This rigorous approach is also evident in the strong bias towards active strategies . Nearly two-thirds prefer active funds to integrate ESG . Investors therefore want managers to use active security selection to uncover ESG opportunities and active ownership to engage and influence investee companies .
The increasing sophistication of ESG investors can also be seen in their attitude towards the UN Sustainable Development Goals ( SDGs ). Almost a third say that the ability to report on specific SDGs is one of the most important elements of fund sustainability reporting — nearly double last year ’ s percentage . Half say the ability to offer the full spectrum of SDG themes is important when selecting funds .
Crucially , as investors expand their ESG knowledge base , they increasingly recognise that companies with good sustainable credentials are more likely to outperform . Fewer investors this year point to sacrificing returns as an adoption hurdle . And more are now investing in ESG
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