Setting The Pace On ESG

By Dr Sumitra Nair, Senior Vice President & Head – Strategy & Policy of MDEC

Malaysia is operating in an increasingly competitive global marketplace, through the rapid adoption of Environmental, Social and Governance (ESG) practices by other countries. Nearly 80% of the largest 50 economies in the world have, or are developing, disclosure requirements on ESG.

Over the last couple of years, in particular, there has been much greater scrutiny of ESG issues, primarily in response to the pandemic and the related social and economic impact. There is clear evidence that strong ESG practices are becoming increasingly essential to give businesses the competitive edge needed in the marketplace to survive.

Despite this, the 2020 KPMG report on “The ESG Imperative for Technology Companies” reveals that heightened awareness and appreciation of ESG issues has not yet fully translated into business practices, with 45% of tech companies globally struggling to link their growth strategy with a wider societal purpose.

Meanwhile, closer to home, Bursa Malaysia Chairman, Tan Sri Abdul Wahid Omar, recently pointed out that although the ESG movement is still at a relatively nascent stage in Malaysia, the awareness of such issues has improved since the Covid-19 outbreak. Clearly, an opportunity exists therefore for tech business leaders to drive long-term corporate value and enhance investor confidence by improving their organisations’ ESG practices.

Datuk Seri Mustapa Mohamed, Minister in the Prime Minister’s Department (Economy), recently highlighted the impressive growth of Malaysia’s digital economy, which is on course to achieve a contribution to GDP of at least 25.5% by 2025.

However, he also stressed the need for us to work together to address key economic, social and environmental challenges, thereby ensuring that no one is left behind in this dynamic and competitive environment that we live in today.

MDEC’s foundation is built on our values, which guide our actions in ways that are good for both the Rakyat and the planet. We are committed to advancing a more inclusive and sustainable digital economy for our nation and recognise the increasing role that ESG will play in ensuring its future growth.

We have already aligned all of our activities with the United Nations Sustainable Development Goals, in particular SDG8 Decent Work and Economic Growth and SDG9 Industry, Innovation and Infrastructure, which accounted for over 80% of our activities in 2019 and 2020.

We are committed to “walking the talk” and driving ESG-friendly practice within digital economy related sectors. Accordingly, MDEC has recently established a ESG and Sustainability Department.

The new Department will take a two-pronged approach: internalise the adoption of ESG practices within MDEC, and by advocate sustainable business practices across our digital economy ecosystem.

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