ESG reporting standards must be elevated

Agriculturist and paraplegic Dr Billy Tang.

THE environmental, social, and governance (ESG) criteria are a set of standards used to evaluate a company’s operations and performance in certain key areas.

These standards have become crucial for promoting sustainable and responsible business practices.

By adhering to these standards, companies can attract investment, manage risks, comply with regulations, enhance their reputation, and achieve operational efficiencies.

However, in today’s world, has too much emphasis been placed solely on the reporting and compliance aspects?

Sunway Group executive director of chairman’s office Ong Pang Yen notes that while every company and industry has its own interpretation of ESG, there has been some observation that many focus on the compliance framework rather than implementing solutions.

“It is too driven by the measurement and disclosure part, but this is an extremely critical time to be in,” he tells StarBizWeek.

Ong says, according to the United Nations Sustainable Development Goals (SDGs) Report 2024, only 17% of the SDG goals are on track to be fulfilled by 2030. The report notes that 83% are off track, and from that 83%, 17% are actually regressing.

Despite global warming being a real concern, Ong mentions that 80% of scientists from the Intergovernmental Panel on Climate Change do not think the planet will be able to contain global warming to 1.5°C.

“Rather, the scientists have opined that it may be sitting at 2.5 degrees Celsius, while almost half of the scientists think it will hit 3 degrees Celsius in this century,” he says, adding there is, of course, a need for regulations and advocacy.

However, Ong notes that the focus should be on resources for solutions.

“There are 169 SDG targets, which means there are problem statements for them. We should identify the doable solutions so we can move the needle where ESG is concerned,” he says.

Ong cites the example of the concern over the loss of biodiversity, which is mostly due to deforestation to feed the eight billion people in the world today.

“About 90% of deforestation is due to agriculture for food, so if there is going to be another two billion people in the world at some point, how will people feed themselves? The reality is that having a larger chunk of food production requires more land, leading to more deforestation and loss of biodiversity,” he says.

He adds to this end, modern farming technology can be part of the solution, producing crops 20 times more per square metre.

“Vertical farming – our group is embarking on making it commercially viable so it’s scalable. It is closely related to urban farming. While it is more costly because it consumes energy, we must work on it as a solution to perfect it,” he said.

Ong explains that with vertical farming, the farm-to-fork concept is roughly about 10km apart, while other methods may require travel up to hundreds of km, contributing to greenhouse gas emissions.

Another important element of the SDG’s is the carbon capture factor.

“Right now, most companies want to see where their scope is at, whether it is one, two or three. There are already solutions available, so why not use the money to ensure resources are placed at the right solutions,” he says.

Ong notes that without a proper carbon tax system, the entire ecosystem cannot thrive.

“If there is one, incentives become viable and the ecosystem can work in tandem with green technology. But the point is, in all solutions, we must persevere and push forward, placing action as equally as important as disclosure,” he said.

Meanwhile, across other industries, many have been embarking on their very own ESG journey.

IOI Properties Group Bhd’s ESG journey has been at the forefront of its goals, aligning with the property developer’s aim to lessen its carbon footprint.

A spokesperson says the group started its plans decades ago in the form of corporate social responsibility, or CSR, before it evolved into more specific areas like governance.

“We are currently looking at how to reduce carbon emissions in our projects, and how we can all work together towards our goals by 2050,” the spokesperson says.

UDA Holdings Bhd is another developer trying to make its mark in the sustainability scene by instilling SDG goals beyond just the company.

A spokesperson says in the last three years, they have further ramped up their efforts to dive into ESG goals.

“There is an urban farming project within the office environment, for example. We’ve tried to inculcate the habit of employees having a go at this project and encouraging them to join. We saw 95% participation in this project, which is really good,” the spokesperson says.

An intern of Dr Billy Tang Chee Seng, who founded People with Disability smart farmability, says food security is one of the largest issues that many countries face today.

Patience Dumpsy, who hails from the United Kingdom, says the project uses the latest technology to grow food for the underprivileged community and she has been working on how they might accelerate it.

“Dr Billy has carried the vision of ending world hunger, and this project actually covers 10 out of 17 of the United Nation’s SDGs. As an intern, a part of my involvement is about accessing how sustainable the project is. We are also looking at bringing it over to countries like Nigeria and Ghana,” she says.

Dumpsy says collaboration is still key to achieving these goals together, as global warming and climate change is not, and should not, be a one-man show.

“This is why the Asia ESG Positive Impact Consortium conference is so important. It brings together minds and experts who can support each other on their respective journeys,” she says.

The consortium, held last month, was an alliance of media powerhouses in South-East Asia, namely Malaysia’s Star Media Group Bhd (SMG), Indonesia’s KG Media and the Inquirer Group of Companies of the Philippines, under the shared mission of fostering influence that promotes sustainability principles as the main driver of green economic growth across the region.

Eco World International Bhd chief executive officer Datuk Chang Khim Wah says the consortium was a great effort to extend ESG collaboration beyond the country’s borders.

“Sustainability requires everyone to work together to achieve a better future for our shared planet. Congratulations to SMG for spearheading this effort on our nation’s behalf,” he says.