Net Zero Journey Part 1: What Board Members Need to Know
If you missed our event, do catch the recording on our YouTube Channel.
Here are the key takeaways:
Alizan Mahadi, ISIS
National and domestic policies
1. National and domestic policies
Complexities due to
all play a role in influencing the progress of policy targets
In Malaysia, we don’t have a net zero long term target, although we have a commitment by 2030. There are a lot of policies for mitigation and adaptation with the aim of mainstreaming climate change and to have an integrated response. They are aligned to 5 year development plans especially starting with the 11th Malaysia Plan.
There is also spatial planning for climate change adaptation.
However, the challenge is in policy implementation. Instruments , hard (i.e. regulatory and broad-based), soft (action plans, guidance) and market based (incentives) are insufficient. Thus far there are NO disincentives and no hard instruments.
The policy making process is complex (vertical i.e. Federal and State; and horizontal i.e. multitude of ministries to navigate), it is cross cutting sectors and therefore challenging to implement, but emanates from 1 coordinating ministry i.e. KASA.
It will require strong political will and a push from industries to get the whole society/govt/business to make any change to achieve net zero
2. International policies
Important to understand that Malaysia is part on an international community
Climate change is demanded from trading partners
Part of the Global supply chain – either you are part of the club or you’re out
Domestic policies need to harmonise with international policies, also compliance with international market forces
3. Private governance
Companies need to understand that climate change is not just an environmental issue but a strategic issue – poses both transition and physical risks. Transition is arising from the broader international agreements, market demand, consumer sentiment. Part of risk management
Thus businesses need to engage with policy makers both domestically and internationally.
Faroze Nadar – UN Global Compact Network, Malaysia & Brunei
Why do companies need to set science-based targets (SBTi)?
Access to finance and investors
Governance and future proofing ie help to navigate transition risks
Supply chain requirements
SBTi methodology calculates a budget for the country, sector and company in order to align itself to several pathways to net zero, i.e. aligning to Paris 2015.
Thus far no G7 stock index company has achieved full alignment yet.
SBTi allows investors and stakeholders to take your “corporate temperature”
Ching Yun Wee – Malaysian Plastics Manufacturers Association
Our lives and economy are fossil fuel based. Plastics are ubiquitous.
Need a revolutionary transformation in understanding the consumer is also responsible to participate in a circular economy. Make, use and return natural resources in a circle without leakage into the natural system.
Sectoral policy targets
National energy grid
Translating climate risks/ pricing them to short/medium term incentives and disincentives
Coordination of all parties – collection, policy implementation, government effort
Set small incremental targets
Fundamental change in reimagining the future
Overcome resistance due to lack of knowledge – we are currently “locked in” to the old ways
Understanding and translating the message to simpler language
Having a business purpose in addition to profits