Malaysia’s corporate boards are not adequately equipped to deal with environmental, social, and governance (ESG) requirements and embed ESG into the business and create value from it, according to Institute of Corporate Directors Malaysia (ICDM) president and CEO Michele Kythe Lim (pix).
She said the ICDM’s board survey indicated that companies in Asean, including Malaysia, recognise the importance of ESG but the barrier to adopting them is that companies are not trained to do so.
“Risk-based analysis (reveals) the gaps and you know where to start. Just pick a few and start from there and you will see the rewards. Those who can pivot faster will see the results sooner.
“ESG is about the sustainability of the business, it is not corporate social responsibility (CSR). It is ensuring that you look at the sustainability of the business ethically. It is not just financial performance but the non-financial part of the business as well. It adds value to your top line, reduces cost and increases productivity. There are many positives to adopting ESG but you need to be in it for the long run. Investors are voting and they will invest in companies that adopt sustainability in their business model,” Lim told reporters at the virtual launch of the Inaugural 2022 Asean Board Trends Report today.
She said a recent survey with the Securities Commission Malaysia showed that capacity building to address sustainability issues is among the top priorities of Malaysian boards.
“It ranks number four behind business continuity, managing Covid-19 risk, and people management. That is why we come out with a sustainability-driven governance model to inculcate in companies ways to turn risks into opportunities.
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13 December 2021