KUALA LUMPUR (Oct 14): The private sector plays a crucial role in the transition towards a low-carbon economy, said Deputy Prime Minister and Minister of Energy Transition and Water Transformation Datuk Seri Fadillah Yusof at The Edge Malaysia ESG Awards 2024.

The annual event, which recognises ESG leaders among public-listed companies (PLCs) and asset management firms in Malaysia, was held in Mandarin Oriental Kuala Lumpur Monday night.

“Investors also play a crucial role in this transition. Fund managers who incorporate ESG factors into their investing decisions can mitigate risks that arise from climate change, while taking advantage of opportunities in emerging sectors like renewable energy,” said Fadillah, who was the guest of honour.

A total of 62 awards were presented to 48 companies during the gala dinner, attended by 370 representatives from various companies and organisations.

The biggest winner in the PLC category was Vitrox Corporation Bhd (KL:VITROX), which took home two gold awards for being the best performer in the technology sector and most improved ESG performance over a three-year period with a market cap of over RM5 billion.

In the funds category, the biggest winner was BIMB Investment Management Bhd, which took home three gold awards in the best E, S and G categories and a silver award for the best allocation fund category.

RHB Islamic Asset Management won two gold awards in the best overall fund and best equity fund categories. RHB Asset Management, meanwhile, took home the gold award in the allocation fund category and the silver award in the best impact resource security category.

Datuk Ho Kay Tat, publisher and group CEO of The Edge Media Group, said that the pressure for businesses to adopt ESG is still there, despite pushback in some regions, competing priorities in addressing cost-of-living issues, and disruptions due to war and other factors including climate change.

“Many regulations and frameworks, such as carbon pricing regimes and sustainability reporting requirements, are on the horizon and will affect businesses that do not comply,” said Ho.

The primary source of greenhouse gas emissions in Malaysia, and for most companies, stems from energy use, particularly in electricity generation and transportation. To have a just and smooth energy transition is therefore crucial, added Fadillah during his speech.

“In alignment with this goal, our government has embarked on a strategic decarbonisation effort through the National Energy Transition Roadmap (NETR) to achieve 70% renewable energy in our installed power capacity,” said Fadillah.

The government has embarked on decarbonising the sector through the NETR, and introduced many programmes and incentives such as the Net Energy Metering, Corporate Green Power Programme and most recently, the Corporate Renewable Energy Supply Scheme to make this possible, the minister added.

Additionally, many PLCs are already tracking water usage and recycling of water as part of their ESG efforts, which ensures water security in Malaysia.

“This presents a win-win proposition for all of you, especially for those of you in which your company has set ambitious net-zero targets. By reducing energy emissions, you not only accelerate your path towards sustainability, but also benefit from significant savings on energy costs, particularly in light of the recent adjustment to electricity tariffs,” said Fadillah.

“The Energy Transition and Water Transformation Ministry, or Petra, has embarked on numerous initiatives aimed at fostering sustainable economic growth. We are dedicated to ensuring an ample supply of renewable energy for both local corporations and foreign investors, while also reinforcing robust water infrastructure,” he said.

This year, 779 PLCs were appraised by FTSE Russell for their ESG performance and therefore eligible to be considered for the awards under the PLC category, compared to 356 PLCs last year.

Under the funds category, the number of funds designated as sustainable and responsible investment (SRI) funds in Malaysia increased from 69 last year to 80 as at 31 July, 2024, according to the Securities Commission Malaysia.

“2024 is an exciting year for the ESG Awards because this is the first time almost all Main Board companies on Bursa Malaysia (KL:BURSA) were in the running for a trophy,” said Ho.

With a much bigger universe of PLCs competing this year, a new category — the emerging star — was introduced to recognise the best new performers.

“In the funds category, many of the SRI funds now have at least three years’ of financial track record, seeing that the majority of Malaysia’s SRI funds were established in 2021. That’s why we are introducing a new category this year that doesn’t just consider the funds’ ESG performance but also, their financial returns,” said Ho.

The introduction of the new category sends a message that it is essential for the funds to not only adhere to the high standards of ESG compliance but also generate good returns for investors, he added.

The Edge Malaysia ESG Awards 2024 is organised in partnership with Bursa Malaysia and FTSE Russell, with Morningstar as the knowledge partner for the funds category and Deloitte as the auditor. UOB Malaysia is the main partner again for this year’s awards.