KUALA LUMPUR (Aug 13): Advancing technologies like electric vehicles, solar panels and smart grids help reduce emissions but may be offset by increased emissions from the semiconductor industry, said Andrew Kam Jia Yi, associate professor and senior fellow at the Institute of Malaysian and International Studies at Universiti Kebangsaan Malaysia.
Speaking during the “The role of semiconductors in green industrialisation in Malaysia” session organised by UN Trade and Development (UNCTAD) and Khazanah Research Institute (KRI), Kam said that the semiconductor industry is highly energy and resource intensive. Therefore, decarbonising key industries is a crucial step towards achieving net-zero emissions. The event was hosted to discuss Malaysia’s green industrialisation strategy.
“The New Industrial Master Plan 2030 secures the aspirations of a transition to a net-zero economy. A critical step in achieving these goals is decarbonising key industries, one of which is, of course, the semiconductor [industry],” said Kam.
The transition to a green economy presents business opportunities for the semiconductor industry such as the development of green technologies and energy-efficient solutions. Moreover, as investors and consumers prioritise environmental, social and governance (ESG) factors, commitment to sustainability can enhance a company’s reputation, said Kam.
“Investment in renewable energy [enhances] corporate image and market position, making it much more appealing to consumers and investors who prioritise environmental responsibility,” he explained.
Currently, larger companies tend to have higher energy consumption and emissions, said Kam. However, these companies demonstrate greater efforts to reduce hazardous waste.
“Hazardous waste actually has a negative correlation with company performance. [This means] that companies have more intention of reducing hazardous waste as they grow bigger. Most probably because it affects the environment and [employees] as well,” he noted.
“As for non-hazardous waste, it was a positive correlation, because after the Covid-19 pandemic, there is more waste being produced.”
While the semiconductor industry has been a major driver of economic growth, it must also address its environmental impact. To do this, the quality and consistency of sustainability reporting need to be improved to enable better monitoring and evaluation of industry progress, said Kam.
Environmental measures and strategies in semiconductor enterprises include energy efficiency and renewable energy; resource conservation and infrastructure; and facility improvements.
A conducive business environment for semiconductor companies and the promotion of sustainability and decarbonisation are necessary to align the greening of the semiconductor industry with Malaysia’s industrialisation objectives, he said.
This is done by diversifying the semiconductor ecosystem, implementing carbon pricing mechanisms, developing more green finance programmes and promoting green infrastructure.
“The most important thing is to advance reporting and data quality protection. Yes, Bursa Malaysia has sustainability requirement reports. But then again, if these reports are not being enforced or monitored, you have companies sending half-page sustainability statements. [These] are not helpful in terms of data and understanding what is going on,” said Kam.