There is much hype in Malaysia and around many other countries about non-governmental organisations (NGOs) collaborating with the government and industry among others. But, the reality is somewhat different!
Of course, there are great variations among the NGO community—depending on who set them up, their objectives and how they are run. Those that are really independent of government and industry are the ones I would like to write about. The others are likely to have conflicts of interest or are joining in ‘greenwashing.’ The other aspect is their capacity, especially in terms of knowledgeable staff of the NGOs, as well as their financial independence.
The independent NGOs would view things in the public interest or good. Thus they would be looking for meaningful sustainability, just treatment of employees and public as well as good governance in the firms that claim to adhere to ESG principles. They would not be taken in by occasional activities undertaken outside the firm as mere CSR or publicity-related events.
What forms are the collaborations to take? Mere endorsements of claims made by the firms? Rigorous examination of the claims? Evaluations during different parts of the year of the operations of the firm- most useful. There should be reasonable monetary remuneration for the time spent by the NGO staff or office bearers. Such remuneration should not be seen as an obligation to express positive views about the payer.
But are the entities prepared to have such a meaningful collaboration in this country? Even the word ‘collaborate’ means working with the enemy! So how do NGOs work with businesses [their enemy]? That is the crux of the issue.
Husband and wife duo (left) CETDEM Organic Farming Project Coordinator Tan Siew Luang and environmentalist Gurmit Singh have been championing sustainability for majority of their lives.
Firms are mainly set up for profit. So their driver is delivering maximum profits for their shareholders or owners. Rarely are they altruistic. They will not undertake ESG work unless they are forced by regulations established by the government or by market forces [either by their headquarters or the local bourse]. But many would take shortcuts or try to implement them as CSR activities.
Cooperation with corporations
Taking collaboration as a form of cooperation, let us examine how well this will work out for NGOs and businesses in Malaysia.
Firstly, we have to assess the willingness of both NGOs and businesses to cooperate in ESG evaluation. This seems to be somewhat limited among both parties. The push within the business sector seems weak with Bursa Malaysia being content with self evaluations [generally by ticking off claims] rather than insisting on ESG being incorporated within the entity itself. There is also no legal requirement. The independent NGOs are also not very keen to undertake the evaluations.
Secondly, there are doubts about the amount of public scrutiny that firms are subjected to in this country. Except for The Star and The Edge, the mass media does not keep an eagle’s watch on the ESG performance of firms. Social media is a bit more alert but does not regularly report on ESG performance. It is left to the publicity surrounding glaring failures in sustainability by individual firms to generate public or government pressure for remedial action.
Thirdly, instances of NGO collaboration with firms are very ad hoc and quite unstructured. This arises from the two factors mentioned above as well as the general state of affairs in Malaysia. Apathy seems to be the norm.
Stepping out of the box
How to get out of the rut seems to be the challenge. There are a number of possible options—all requiring forward thinking from the NGOs, the government and the business sector.
Despite the current disinclination towards environmental and social issues among the business sector because of the disruptive Trump tariffs, we need to get a national commitment to ESG since we are already undertaking SDGs under the UN umbrella.
This commitment can start with the establishment of a National ESG Council with equal representation of NGOs, trade unions, business and government, which will provide oversight of the ESG process and issue an annual public state of ESG implementation report. The council could also have accreditation functions.
Simultaneous to this, there should be a public list of businesses that are willing to undertake systematic and thorough ESG implementation and are ready to collaborate with NGOs to get proper evaluation of their efforts, at least on an annual basis. There should also be a public list of independent NGOs who are ready to take part in the evaluations with details of their expertise and manpower.
Both parties will report to the ESG Council when they have entered into a collaboration exercise and its terms. It should be obligatory on the part of both parties to submit the final evaluation report to the council within one month of the completion of the evaluation.
Bureaucracy should be minimised and all reports should be in the public domain by being online. Trade secrets should only be invoked minimally and only be redacted in the online versions of reports.
It is hoped that the above steps could produce a meaningful collaboration between independent NGOs and the business sector in the area of useful ESGs for Malaysia.
Gurmit Singh is the founder of two prominent local environmental organisations—the Malaysian Environmental Protection Society (EPSM) and the Centre for Environment, Technology and Development (CETDEM).
