Once a buzzword among businesses, environmental, social and governance (ESG) is now becoming a competitive necessity across South-East Asia’s fast-evolving retail landscape.
The region has witnessed a marked shift in consumer expectations, with ESG considerations increasingly shaping shopping preferences and corporate strategies.
From retail and logistics to food services and manufacturing, businesses across Asean are adapting to a new reality as consumers align their purchasing power with their values.
MR DIY Group (M) Bhd says it has observed a noticeable shift in consumer expectations across Asean.
“This shift is particularly visible in markets like Malaysia, Singapore and Thailand, where ESG awareness is growing rapidly.
“As a regional leader, we see this as an opportunity to lead by example and meet the evolving expectations of our customers across Asean,” the group says.
Aligning ESG principles with its business model, MR DIY’s initiatives span from installing solar panels at distribution centres and stores to reducing plastic packaging, supporting education and enhancing employee wellbeing.
Its social arm, the Yayasan MR DIY Foundation, supports programmes in education, disaster relief, healthcare and support for underprivileged groups.
“We believe profitability and practical sustainability go hand in hand.
“Our ESG investments are designed to drive operational efficiencies, manage risk and future-proof our business,” says the group, adding that while executing ESG practices does indeed require upfront investment, MR DIY stands to benefit in the long term.
Another retail giant echoes this view as well.
AEON Co (M) Bhd chief human resources officer Kasuma Satria says that aside from driving operational efficiency and risk mitigation, sustainability-driven investments drive innovation in products, services and business models – potentially creating new revenue streams and market opportunities for the group.
For AEON, many initiatives such as energy efficiency projects, solar photovoltaic installations and the elimination of single-use plastic bags serve a dual purpose, allowing for reduced environmental impact.
However, challenges remain.
Kasuma acknowledges that rising expectations for ESG compliance and disclosure, along with the complexity of managing a supply chain that includes micro, small and medium entrepreneurs with varying levels of ESG readiness, remain major hurdles.
MR DIY points to the same concerns, saying that maintaining consistency in sustainable sourcing and ethical labour practices across a broad supply chain is no mean feat.
Balancing the cost of ESG initiatives with the pricing expectations of the value retail segment is another pressing issue highlighted by the group.
To address these concerns, businesses are leaning into supplier development and operational innovation.
AEON, for instance, has launched the #AEONResponsible Suppliers Programme to build supplier resilience and improve ESG transparency.
Additionally, Kasuma explains that “this includes rolling out capacity-building initiatives, introducing ESG performance tracking systems, and ensuring that suppliers have access to the necessary resources and financing to meet sustainability objectives”.
Meanwhile, MR DIY is focusing on strategic partnerships, supplier education and the use of digital tools to improve traceability.
“We foster a culture of accountability and continuous improvement, ensuring that ESG is not a standalone initiative but an integrated part of our business strategy,” the group says.
Looking ahead, both companies are optimistic about ESG as a strategic growth area in Asean.
Furthermore, AEON sees opportunities across the region, particularly in markets such as Thailand, Cambodia and Vietnam.
MR DIY, on the other hand, is betting on innovation in circular economy models, sustainable packaging and inclusive employment.
The group notes: “As awareness and regulatory standards rise across the region, we believe the companies that lead with purpose and transparency will earn long-term loyalty and competitive advantage.”
Ultimately, ESG is no longer a “nice to have” concept in the Asean consumer market; it is a business imperative.
As regulatory frameworks tighten and consumer consciousness rises, the companies and markets that will thrive are those that integrate ESG deep into their value chain – prioritising not just profits, but people and the planet.
