This article first appeared in The Edge Malaysia Weekly on June 19, 2023 - June 25, 2023

Eighty corporate leaders and fund managers — partners and winners of The Edge ESG Awards 2022 — gathered at the Four Seasons Hotel in Kuala Lumpur on May 22 for a private networking dinner hosted by The Edge Malaysia and United Overseas Bank (Malaysia) Bhd.

The event was meant for sustainability practitioners in these companies to meet their peers and exchange views.Participants were seated across three tables. As the five-course meal was served, chatter and laughter echoed in the dinner hall.

The Edge Media Group publisher and group CEO Datuk Ho Kay Tat and UOB Malaysia CEO Ng Wei Wei each gave a welcome speech before the dinner.

Ho expressed his appreciation for the partners of the inaugural The Edge ESG Awards that took place in November last year. UOB is the main partner of the awards, with other key partners being Bursa Malaysia, FTSE, Morningstar and Deloitte Malaysia.

He pointed out that the sustainability trend, otherwise known as ESG (environmental, social and governance), had faced a pushback over the years. A key reason for this could be the high compliance cost, partly reflected in the annual reports of public-listed companies that are now 20 to 30 pages thicker than years ago due to ESG reporting requirements.

But the sustainability trend is irreversible, Ho said, as it is the right path to take. “The cost of compliance is not cheap, but it is money worth spending. While businesses must make as much profit as possible to reward shareholders and, of course, to pay their bankers, this must be achieved without harming the larger stakeholders. Profits can only be sustainable if the society and environment that we operate in are not harmed by what we do.”

The sustainability trend makes the job of fund managers harder as they would have to forgo opportunities of investing in extremely profitable companies with low ESG scores. But Ho believes they were savvy enough to navigate the challenges.

“Last year, we gave out 65 awards to 44 winning companies. We hope to see a higher number when we present The Edge ESG Awards 2023 this November, as it would indicate an improvement in the ESG initiatives of businesses and fund managers,” Ho noted.

Ng began her speech by congratulating The Edge Malaysia for successfully hosting the inaugural The Edge ESG Awards last year as well as the award winners.

The awards were timely, she said, as there has been increasing pressure on companies by their stakeholders globally to address their impact on the environment and society. This is particularly true for businesses in Malaysia as it is an exporting nation.

“Today, more than 60% of Malaysia’s trade partners and over 8,000 corporations globally have announced their net zero commitment by 2050.

“The Malaysian government has sustainability policies underway. Now, private sector leadership is critical for us to avoid falling short of our national ambition, which is net zero by 2050.”

“We are all on this journey together, and I would say no one person or organisation has all the answers when it comes to sustainability. We must learn from one another and share our experiences and knowledge to progress towards our common goal,” she added.

As one of the biggest banks in the region, UOB knows it has a key role to play in promoting sustainable practices and financing projects that support a better future for Earth, Ng said.

In fact, the bank started its ESG journey 10 years ago and today has one of the most comprehensive and market-leading financing frameworks and solutions among its peers, which the bank has implemented across its five key Asean countries as well as China and Hong Kong, Ng added.

These include the solar financing programme the bank launched in 2019 to help businesses and homeowners switch their energy source to solar power. The programme was subsequently expanded to offer financing to solar engineering, procurement, construction and commissioning contractors and project developers.

As a group, UOB’s sustainable financing portfolio reached S$25 billion (RM74.92 billion) in 2022, and it is well on track to achieve its goal of S$30 billion by 2025, said Ng.

“In Malaysia, it is heartening to see businesses embrace sustainability. Our financial commitment to this area, to the country, has grown more than six times compared to the previous year.”

According to Ng, UOB announced its commitment to net zero by 2050 in October. “I’m proud to say that our new office in Malaysia, called UOB Plaza 1, in KL, is a green building and has been earmarked for platinum certification both in Malaysia and Singapore.”

Before ending her speech, Ng said UOB Malaysia is looking forward to working with the business community to help take the ESG agenda in Malaysia to a new level. “As a banker, I would say our aspirational goal is to make sustainable financing the norm rather than the exception.”

She also confirmed the bank’s commitment to support The Edge ESG Awards for a second year. “I’m confident that the awards will become a coveted symbol of distinction and achievement, setting an exceptional standard of excellence for ESG in Malaysia.

“Once again, I extend my heartiest congratulations to all award winners for pursuing the right balance between growth and ESG consideration,” Ng concluded.

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