PETALING JAYA: Many companies still treat carbon as a disclosure burden, but should they look at it as more of a control system for trade?
Hemal Modi, chief executive officer and founder of Clear Carbon, said for companies, one of the most critical part of the business is its investors.
“If you didn’t have a clear reporting stance, would you attract investments?
“Would you have to pay taxes for a cross-border adjustment mechanism into a geography where they already have carbon taxes? These are the questions to be asking today,” he told StarBiz in a recent interview.
According to Hemal, there has been a noticeable surge of companies needing good data architecture in the marketplace.
This has been particularly true for South-East Asian economies that are looking at where their next investments could come from.
He mentioned data centres in this part of the world have been particularly big.
“Many already have the data, but don’t possess the right systems and processes to do it well.
“In turn, it makes them see this as a burden, rather than a competitive advantage,” he explained.
Hemal added, this is not lost on many large companies regardless of whether they currently report their carbon footprints or not.
“Many understand this is a requirement and have put the responsibility on their chief financial officers, whether it is managing financial risks or setting climate aspirations.
“The most important thing is to measure what matters,” he noted.
Clear Carbon emerged from an initial push to help companies digitally transform, which later evolved into a broader mission to drive sustainable transformation as well.
Hemal said sustaining both the topline and bottomline might be at the core of every business, but once in today’s marketplace, once the cost of carbon and climate impact is overlaid, the real impact begins to be felt.
“We began to look at how data and science could help companies get the right outcome. So what Clear Carbon does is help companies record, report and reduce carbon emissions using data,” he explained.
The group also ventured into digital twins, in order to keep a close eye on the performance of assets.
“Digital twins enable us to see emission accounts and reports in real-time. Without these, one may not be able to understand particular assets and make the smart decisions for them,” Hemal said.
He pointed out that while Clear Carbon operates across Asia-Pacific, Australia, North America and Europe, he sees plenty of value right here within the region.
“There is so much trade that happens between our geographies here, and we want to be supporting the region without needing to chase after European or other companies,” he noted.
As for Malaysia, moving towards mandatory, ISSB-aligned carbon and climate reporting for both listed and large non‑listed companies is a good step.
This became a requirement under the new National Sustainability Reporting Framework (NSRF), launched in September 2024.
Hemal said Malaysia is ahead of its peers within the region, but behind Singapore, South Korea and Japan.
“In my view, companies should all be on the same lens. Right now, Bursa Malaysia has mandated for companies to report their Scope 1, 2 and 3. What if every single participating company were to publish reports in different formats? This is why standardisation is so important,” he said.
It also will reduce friction for companies, as it will make it easier for businesses to generate outputs, consume information all the while reducing insurance and audit costs.
Meanwhile, Hemal said carbon industry advisories are bound to become more popular as the world moves into a more regulated, carbon-conscious economy.
“I think we have the luxury of having the right tailwinds since, probably I would say, 2018. It has been driven and will continue to be driven by companies who want to make the right decisions.
“A balance sheet of a company’s financials would show the profits and losses, assets and liabilities. In today’s economy, we have carbon lens right running parallel to that, so it’s another optics on top of what you’re already reporting in financials.”
