Climate and Sustainability Ambitions of Trading Partners
In the third series of CGM Primers on Climate Governance, co-founder Dr Kalanithi Nesaretnam welcomed everyone to the webinar and introduced YB Dato’ Sri Mustapa Mohamed, Minister in the Prime Minister’s Department (Economy) who gave the keynote address.
Watch the webinar again on our Youtube channel, read the keynote address here:
"As we aspire to become a carbon neutral nation in the future, priority will be given on low-carbon and climate resilient economic development as well as conservation of the natural resources." YB Dato’ Sri Mustapa Mohamed
The moderator for the panel discussion was Dr Firas Raad, World Bank Country Manager for Malaysia and the panelists included Ambassador Michalis Rokas of the European Union, Ambassador Hiroshi Oka from Japan, Ambassador Gunn Jorid Roset of Norway, Ambassador Cristiano Maggipinto of Italy and Mr David Thomas, Deputy High Commissioner of the United Kingdom.
As the Malaysian chapter of the World Economic Forum’s Climate Governance Initiative, CGM’s mission is to influence non-executive directors of boards of directors of public listed companies to address climate change and reduce their carbon footprint. Corporations are responsible for generating most of the emissions and also have the resources to fix it.
Ultimately, all countries will need to play their role in addressing the climate emergency and keeping temperature rise to no more than 1.5^C. The IPCC (Intergovernmental Panel on Climate Change) warned that to avoid the catastrophic impacts of climate change, greenhouse gas (GHG) emissions must halve by 2030 and drop to net-zero by 2050.
Dr Kala went on to add, “Globally, companies are under unprecedented pressure from their investors, regulators, and customers to demonstrate their climate resilience. Corporate boards are placing more emphasis than ever on ESG, climate and energy transition priorities. This is not only the right thing to do but, it also represents a real business opportunity.
According to a 2018 CDP survey of the largest 500 companies in the world, climate-related business opportunities outweighed the costs and risks by more than double.
Increasingly, companies are engaging with their shareholders to discuss these risks and mitigation strategies. Unilever and Moody's at their annual general meetings (AGMs) have included climate as a topic of discussion. The intent is to get explicit approvals for climate risks and transition strategies from their shareholders. Boards and management teams are now taking a hard look at their businesses and setting science-based targets for GHG emission reductions.
Many governments are also now moving in the right direction. This year the countries representing 70% of the world economy, have made commitments to carbon neutrality.
The European Union, Japan , Norway, and the UK have pledged to achieve net zero emissions by 2050. Even the United States has come back to the fold, and announced that they would halve their emissions by 2030.
In Malaysia we have yet to set a net zero target but it is heartening that the Prime Minister and his cabinet colleagues have started the ball rolling with the launch of My Climate Action Council. A number of priorities have been announced including the implementation of the low carbon mobility development blueprint and a possible carbon tax.
Malaysia was net zero in 2004 and I sincerely believe that we will not have problems working again to achieve this.
Whilst the Govt is working out the policies and incentives the good news is that more companies in Malaysia, are beginning to embark on their ESG journey. I am on the Steering Committee of the CEO’s Action Network, and I am happy to report that over 40 industry captains have come together to adopt best ESG practices.
Another more significant development, is the recent declaration by EPF that it aims to make all its investments based on ESG practices by 2030. So, EPF may no longer invest in non-ESG compliant companies, including oil and gas.
Companies in the future may also be faced with enduring a carbon tax on goods exported to certain countries. The reason we are organising this webinar is to understand better the intentions of these countries and the impact for Malaysian exporters. I am sure the Ambassadors will elaborate on this and I hope this will give Malaysian companies a good perspective of possible directions these countries are taking.
We have already had incidents where goods have been seized because of our labour practices. Increasingly, Malaysia has attracted greater international scrutiny and criticism for issues pertaining to labour practices, human rights, equality, and the environment.
Malaysia needs to step up to the challenge if they want to be able to compete on the global stage. We clearly need to improve. Independent directors of PLCs on the other hand, may need to pay greater attention in future to not only ESG concerns but also to climate accountability.
Whilst, we applaud these countries that have set net zero target emissions for 2050, wouldn’t it be better for the world if they could achieve it much earlier especially if they are leading emitters, when measured on a per capita basis.”
Watch the other webinars, including CGM Primers, on the Climate Governance website.