ENVIRONMENTAL, social and governance (ESG) issues were first mentioned in a 2006 UN Principles for Responsible Investment (PRI) document on the Freshfields and Who Cares Wins reports.
Since then, ESG has played major roles in a company’s success in attracting, engaging and retaining employees correlating to the demographics of the current workforce.
Now more than ever, the success and growth of a business are directly tied to a solid ESG strategy.
Heading into 2023, pressure will continue to be on a broader set of stakeholders of a business which includes shareholders, regulators, employees, customers and community members.
It is expected of companies across geographies and industries to take action on a wide set of ESG-focused concerns, according to Harvard University.
Navigating risks and opportunities will require calibrated solutions that balance these competing priorities, and align with long-term sustainability and profitability.
Businesses with a conscience that want to stay relevant in a world of extreme volatility, complexity and ambiguity without losing sight of people and planet will have to incorporate ESG principles in its business practices. Malaysian conglomerate Sunway Group is leading the way in this effort.
This is in line with the group’s commitment to advance the United Nations Sustainable Development Goals (UN SDGs), which the company believes will chart a holistic and comprehensive road map towards a sustainable future.
But to transform the UN SDGs to genuine actions, the group recognises that measurable tools are required. The company considers ESG as a metric which includes non-financial factors to measure progress and growth – shifting the focus from quantitative growth to a more measured assessment of qualitative progress.
To implement ESG metrics, the company relies on experts in the field such as the Asia headquarters of the United Nations Sustainable Development Solutions Network (SDSN) based in Sunway City Kuala Lumpur, and the Jeffrey Sachs Center on Sustainable Development at Sunway University.
Both entities were established through a gift totalling US$20mil to SDSN by the Jeffrey Cheah Foundation, which plays a large and active role in the advancement of the region’s sustainable development agenda.
Zeroing in on the E, S and G
The company views ESG as a data-driven sustainability mechanism to help manage and mitigate risks as well as a framework that demonstrates transparency and accountability among all stakeholders.
The group has been recently rated as among the top performers in Malaysia’s ESG space. The company’s wide-ranging, ongoing initiatives are further strengthening its position at the forefront of ESG leadership.
As the first in Asia to implement a robust carbon-reduction strategy, the group introduced a carbon-pricing framework into its businesses earlier this year, whereby its business divisions will work towards their own decarbonisation targets. Those that fail to meet these targets will be penalised by having an amount deducted from their bonus pool.
A recent study by RHB Research found that Sunway has been making good progress towards reducing residual emissions within its value chain by 45% by 2030 from the 2010 levels, before achieving net-zero carbon emissions by 2050.
Sunway aims to reduce Scope 3 emissions through sustainable procurement and supply chain practices, as well as green leases such as its recently launched Real Estate Investment Trust (REIT) Green Lease Partnership Programme – to align the group’s energy efficiency goals with tenants.Business with a conscience
Sunway wouldn’t be what it is today without founder and chairman Tan Sri Dr Jeffrey Cheah’s vision and determination that led him to be recipient of the Putra Brand Personality of 2022 award, which celebrates him as an outstanding individual with creativity, perseverance and persuasion.
“Our founder and chairman Tan Sri Dr Jeffrey Cheah has often said we must do business with a conscience, it must not be profit at all costs,” says Ong Pang Yen, executive director of Sunway Group chairman’s office.
“That is the value system and culture at Sunway. It is in the DNA of the company right from the start.”
Dr Cheah’s philosophy to conduct business with a conscience and the group’s commitment to the people and planet continue to be recognised with a maintained MSCI ESG Rating of A and highest FTSE4GOOD Bursa Malaysia ESG Rating since being rated in 2016.
The group now ranks among the top 10% percentile of its Industry Classification Benchmark Supersector that has been assessed by FTSE Russell.
“It must not be profit alone at all cost. We can do well by doing good,” says Dr Cheah.
“It is important to emphasise that ESG is only a means to an end.
“We should never lose sight of the fact that sustainable development is the over-arching goal that we should all pursue and promote.
“This is why Sunway has fully embraced the 17 UN SDGs,” he says.