KOTA SAMARAHAN, July 30: The Principles of Environmental, Social, and Governance (ESG) are no longer a foreign concept to the region, but many still assume that the assessments carried out by companies and investors are limited to environmental issues only.
In fact, ESG covers a wide range of aspects and related fields.
Sharing her thoughts, the Head of Research Fellow (Energy & Sustainability Division) Institute of Sustainable and Renewable Energy University Malaysia of Sarawak (UNIMAS), Dr Florianna Lendai Michael Mulok said that many are not aware of how ESG are related to each other.
“When it comes to the social part, many do not understand how it relates to the environment but social dimension, the relationship of the company with the stakeholders. For example, does this company work with a supplier that holds the same values?
“If I say I’m a company that practices ethics and believes in reducing waste and (promote) energy efficiency, then I’ll also see how I engage myself with those in the supply chain.
“Also, is this company involved in contributions like Corporate Social Responsibility (CSR) and putting workers first in terms of safety and health,” she explained during an exclusive interview with TVS at UNIMAS on Wednesday.
Dr Florianna also said that the growing importance of ESG principles is increasingly seen as crucial to businesses and investors.
She pointed out that at this critical juncture, investors are increasingly favoring companies that are starting to recognize Environmental, Social, and Governance (ESG) factors.
She added that even if these companies already appear to be well-positioned to avoid controversies that could harm their standing, acknowledging and integrating ESG principles can further strengthen their resilience and appeal to investors.
“We have regulatory changes such as the European Union (EU), where it is coming up with regulations, taxonomy, and policies that they have impulse on, not only within Europe, but also those who have supply chain relationships with EU businesses.
“Thus, there is an increase in government regulations in other parts of the world and policies that are promoting sustainability. We also have increasing demand from investors as they want to seek companies that demonstrates strong ESG performances,” she explained.
Dr. Florianna also highlighted that society is becoming more aware, as evidenced by people boycotting businesses involved in war, which is included in the social dimension of ESG.
She stressed that from consumers’ expectation, they (consumers) want to be associated with businesses that practice ethical and sustainable services. – TVS
