Sime Darby Property shines in ESG standards

Maybank IB Research said the property developer has relatively better ESG disclosures compared with other developers under its coverage.

PETALING JAYA: Sime Darby Property Bhd, which has an above-average score for its environmental, social and governance (ESG) practices, now aims to achieve net-zero emissions across its projects.

Maybank Investment Bank Research (Maybank IB Research) said the property developer has relatively better ESG disclosures compared with other developers under its coverage.

“It had also clearly stated its medium-term ESG targets in financial year 2022 (FY22).

“The company began developing its net-zero pathway with a strategic partner to chart its carbon-footprint reduction, focusing on its operational Scope 1 and Scope 2 emissions before establishing a baseline for Scope 3 in 2023,” it added.

Basically, Scope 1, 2 and 3 is a way of categorising the different kinds of carbon emissions a company creates in its own operations, and in its wider value chain.

The research house said its assessment of Sime Darby Property’s overall ESG score, under the research house’s proprietary ESG scoring methodology, is 63 (out of 100), making Sime Darby Property’s ESG score above average.

The property developer has relatively better disclosures compared with its peers but some of its quantitative parameters have been showing a decline in scoring due to higher construction activities, the research house noted.

The company is one of the largest property developers in Malaysia. Its has 13,600 acres of land worth RM115bil in gross development value as at end-FY23.

However, with 25 active township, industrial, commercial, integrated and niche developments, the developer is exposed to some ESG risks, the research house said.

It added that the developer has zero tolerance against any form of corruption in all its business dealings. It has also established several policies covering, among other things, gifts and whistle blowing, to ensure its business is consistently carried out ethically and with integrity.

In FY22, there were no proven incidents of corruption involving employees or legal cases related to fraud, bribery or corruption brought against the company, the research house noted.

In the fourth quarter ended Dec 31, 2023, Sime Darby Property posted a net profit of RM131.26mil, up from RM103.15mil, which brought earnings per share to 1.9 sen against 1.5 sen.

The group’s revenue rose to RM1.01bil from RM956.9mil previously.

The board of directors declared a second dividend of 1.5 sen, bringing the total dividend to 2.5 sen for FY23.

For FY23, the group reported a net profit of RM407.91mil against RM315.84mil in FY22 while revenue rose to RM3.44bil against RM2.74bil in the previous year.