Navigating ESG Excellence: Insights from Elite Asia’s 2024 ESG Seminar

On Thursday, 26 September 2024, Elite Asia hosted the “Navigating ESG Excellence: A Blueprint for Leaders” seminar at the Four Seasons Hotel Kuala Lumpur, Malaysia, bringing together industry experts and corporate leaders for an engaging discussion on sustainability, green finance, and ESG reporting.The event provided an intellectual hub for discussions on Environmental, Social, and Governance (ESG) principles, sustainable finance, and the increasing importance of ESG reporting. Thought leaders from MIDA, Bursa Malaysia, MioTech, and Elite Asia shared their perspectives on the evolving ESG landscape and the opportunities it presents for businesses to remain competitive in a sustainability-driven global economy. From ESG regulatory compliance in Malaysia to strategic leadership, the seminar mapped out how companies can embrace ESG practices to ensure long-term growth and resilience.

Accelerating ESG Adoption with The Domestic Investment Accelerator Fund (DIAF-ESG)

Malaysia’s economic strategy has been shifting towards sustainability, with the Malaysian Investment Development Authority (MIDA) leading initiatives to support this transformation. Pravinganesha Rajoo, Deputy Director in the Sustainability Division at MIDA, opened the seminar by introducing the Domestic Investment Accelerator Fund (DIAF-ESG), a critical financial mechanism aimed at small and medium enterprises (SMEs) and mid-tier companies (MTCs).

The DIAF-ESG offers Malaysian businesses a financial lifeline as they transition towards sustainable practices. Structured as a matching grant, with companies receiving up to RM500,000 based on their project’s merit, the fund is designed to support companies that aim to meet international ESG standards. As regulatory requirements grow stricter and stakeholders demand more transparent ESG integration, Malaysian companies must rise to the challenge or risk being edged out of global supply chains. The fund is crucial for helping SMEs and MTCs—traditionally more resource-constrained than their larger counterparts—keep pace with ESG trends without compromising their competitiveness.

MIDA’s mission is clear: Malaysia’s industrial sectors must transition to sustainability to thrive in a market increasingly dominated by ESG criteria. The fund covers expenditures linked to ESG adoption, such as certification costs and carbon emissions tracking. As Pravin noted, this initiative is about more than just checking regulatory boxes. It aims to foster genuine transformation, positioning Malaysian businesses to lead in the next wave of global industrial growth, driven by sustainability. ESG Compliance Malaysia has become a crucial consideration for companies looking to stay competitive in the region’s evolving industrial landscape.

To qualify for MIDA DIAF-ESG Grant Application, companies must be majority Malaysian-owned and complete a self-assessment of their ESG practices through MIDA’s B Impact Assessment (BIA) tool. This process helps companies understand their current ESG standing, identify gaps, and take meaningful steps towards sustainability. Pravin emphasised that the success of this initiative lies in its strategic alignment with Malaysia’s Sustainable Development Goals (SDGs), ensuring that ESG adoption becomes a national imperative.

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Maximising the MIDA DIAF Grant to Kickstart ESG Adoption for Malaysia SMEs

Bursa Malaysia’s Sustainability Reporting Framework for Listed Issuers

As ESG becomes more than a moral choice—indeed, a market imperative—Dr. Arvin Kaur, Senior Manager of Corporate Governance and Sustainability at Bursa Malaysia, presented updates on the Sustainability Reporting Framework for Listed Issuers. Malaysia has positioned itself as a leader in the ASEAN region by elevating ESG reporting to global standards, ensuring that Public Listed Companies (PLCs) remain attractive to international investors increasingly guided by sustainability criteria.

Since 2015, Bursa Malaysia has required PLCs to include a Sustainability Statement in their annual reports, marking a pivotal moment in the nation’s corporate governance evolution. The rationale behind this is simple but profound: companies that fail to manage ESG risks will struggle to secure investor confidence and may face regulatory sanctions. The reformed Malaysian Code on Corporate Governance (MCCG) adds further weight to ESG by mandating that boards take strategic oversight of sustainability issues, ensuring that ESG practices in Malaysia are not merely relegated to compliance departments but are integral to corporate strategy.

To support these reporting efforts, Bursa Malaysia has introduced the Bursa Malaysia ESG Reporting Platform, which is accessed via its Bursa LINK system. This platform ensures that PLCs can input and validate their ESG data with rigour, addressing increasing scrutiny from stakeholders. Once the data is saved, errors cannot be rectified—ensuring that companies take their ESG reporting seriously. Investors and regulators alike demand integrity in ESG disclosures, and Malaysia’s approach is designed to ensure just that. By driving higher standards for ESG compliance in Malaysia, the framework positions the nation’s companies as competitive players in the global sustainability arena.

The recent formation of the Advisory Committee on Sustainability Reporting (ACSR) is another step forward. This body will develop the National Sustainability Reporting Framework (NSRF), which aims to adopt International Sustainability Standards Board (ISSB) standards starting with large companies in 2025, followed by smaller firms. As Dr. Arvin noted, this phased adoption allows companies time to adjust to new benchmarks while ensuring that Malaysia remains competitive in the global ESG landscape.

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A Business Guide to ESG Regulations in Malaysia – What Companies Need to Know

Management Approach in Adopting ESG Practices

While regulatory frameworks provide the structure, companies must proactively integrate ESG into their daily operations to unlock its full potential. Yin Yin Hong, Director of ESG Solutions at Elite Asia, presented a management approach for embedding sustainability within corporate culture. According to Hong, ESG is no longer a peripheral concern—it is central to strategic decision-making and long-term competitiveness.

Elite Asia presents an ESG Roadmap called “ESG Maturity Path”, which provides a framework for businesses, outlining six levels of ESG engagement, from mere ESG compliance in Malaysia to excellence. Companies initially adopt ESG practices to comply with regulations and reduce risks. However, those that progress further—by embedding ESG into their long-term strategies—realise that sustainability can be a source of innovation, brand enhancement, and ultimately, value creation.

The first step on this maturity path is producing a Sustainability Report, which serves not only as a compliance tool but as a document that communicates a company’s performance to stakeholders, including investors. Yin Yin emphasised that materiality assessments—identifying the most significant ESG issues—are essential. Companies must also choose appropriate frameworks, such as the Global Reporting Initiative (GRI), to ensure their disclosures are comprehensive and globally aligned.

From there, companies can pursue assessments such as EcoVadis and the Global Real Estate Sustainability Benchmark (GRESB), which serve as industry benchmarks for evaluating ESG practices. EcoVadis is a globally recognized platform that rates businesses across four key categories: environmental impact, labour and human rights standards, ethics, and procurement practices. GRESB, on the other hand, focuses on rating and benchmarking real estate portfolios and assets, providing global evaluations for the real estate sector’s infrastructure and investments.

Yin Yin also encouraged leaders to develop ambitious but achievable sustainability goals, such as achieving gender balance and reducing carbon emissions by 20% by 2029. The key takeaway was clear: ESG is a business imperative that enables long-term success in an increasingly conscious marketplace.

Navigating ESG and Carbon Regulatory Requirements with Digitalised Solutions

Kingsley Tam, Head of Global Sales and Client Operations at MioTech, concluded the seminar by discussing how digital solutions can simplify the process of ESG reporting and compliance in Malaysia. MioTech, a leading sustainability technology provider in Asia, offers platforms that centralise ESG data management and streamline reporting workflows.

Governments worldwide are implementing stringent sustainability disclosure frameworks to tackle regional and global challenges. The United Nations Sustainable Development Goals (SDGs) provide a foundation for corporate sustainability alignment, while the Global Reporting Initiative (GRI) offers universal sustainability reporting guidelines and the Sustainability Accounting Standards Board (SASB) provides sector-specific standards for industry-focused reporting. These frameworks enable companies to benchmark their environmental performance and ensure stakeholder accountability.

In Malaysia, Bursa Malaysia mandates sustainability disclosures for Public Listed Companies (PLCs), positioning the country as a leader in integrating sustainability into corporate governance. Meanwhile, Europe’s European Sustainability Reporting Standards (ESRS) require businesses to disclose material impacts and risks, supported by the Task Force on Climate-related Financial Disclosures (TCFD) for climate risk assessment. For companies exporting to Europe, the EU Deforestation Regulation (EUDR) necessitates proof that commodities are deforestation-free. These regulations highlight the need for companies to manage both domestic ESG compliance in Malaysia and international ESG expectations.

The challenge, however, is not just compliance but managing the vast amount of data required to meet these standards. MioTech’s solution to this is digitalisation. Companies can leverage technology to assess their current ESG performance, conduct materiality assessments, and gather data from across their operations. By centralising these processes, businesses not only streamline their reporting but also enhance data accuracy, which is critical as errors in ESG disclosures can result in significant reputational damage.

Kingsley outlined a four-step framework for companies aiming to elevate their ESG reporting: assessing current ESG status, conducting materiality assessments and gap analyses, engaging stakeholders to measure performance, and finally, setting improvement goals. Technology, in this process, serves as the backbone, enabling businesses to track key performance indicators (KPIs) and ensure their disclosures meet both Malaysian and global standards.

Companies that adopt digital solutions like MioTech’s will find themselves better prepared to navigate the complexities of international ESG regulations, from Malaysia’s Bursa Malaysia requirements to Europe’s EUDR and TCFD frameworks.

Key Takeaways from Elite Asia’s ESG Seminar

The Elite Asia ESG Seminar showcased the intersection of regulatory frameworks, strategic leadership, and digital innovation in advancing ESG adoption across industries. From MIDA’s DIAF-ESG fund, which provides critical financial support to SMEs, to Bursa Malaysia’s advanced Sustainability Reporting Framework, Malaysian companies are well-equipped to integrate sustainability into their business strategies. Yet, as Elite Asia and MioTech demonstrated, success in ESG requires more than compliance—it calls for a proactive, tech-driven approach that transforms sustainability from a regulatory necessity into a source of long-term value creation.

Companies that take a proactive approach to ESG reporting—leveraging technology and data—will not only meet the growing demands of regulators and investors but also secure their place as leaders in the sustainability movement. Those that master ESG will not only survive but thrive in a future where sustainability is the new competitive frontier.