Saturday 23 Nov 2024
By
main news image

This article first appeared in The Edge Malaysia Weekly on October 28, 2024 - November 3, 2024

Hektar Real Estate Investment Trust (Hektar REIT) (KL:HEKTAR) has won the gold award at The Edge Malaysia ESG Awards 2024 in the outstanding ESG performance and dividend return category, showcasing its ability to balance occupancy growth with sustainability initiatives.

According to chief operating officer Sabrina Halim, despite a 4.7% increase in occupancy and a 10% rise in footfall across its properties in 2023, the company has maintained energy consumption at 2022 levels, highlighting its commitment to operational efficiency.

She says the company achieved significant environmental gains, reducing diesel reliance by 51.17% and cutting carbon dioxide (CO2) emissions by 26% in Scope 2. Scope 1 emissions decreased by 40% while water consumption dropped by 3.91%.

As part of its sustainability efforts, the firm has allocated RM18 million to upgrade lifts and escalators at Subang Parade. This investment aligns with the Principles for Responsible Investment and is a crucial component of the asset enhancement initiatives aimed at repositioning Subang Parade as a family-centric destination while improving the mall’s overall ambiance.

The company identified managing energy consumption amid rising tariffs and balancing cash flow with sustainability as its main challenges in maintaining ESG performance over the past year.

Despite rising costs, we remain dedicated to supporting our tenants and customers, especially given the increasing frequency of heatwaves affecting the region - Sabrina

According to Sabrina, the increase in energy tariffs and high energy usage, particularly due to ageing infrastructure, have complicated efforts to uphold ESG standards. Chillers, which account for 40% of total energy consumption, have been a major area for optimisation.

To tackle this issue, Hektar REIT partnered with UEM Edgenta for an investment-grade energy audit, launching 15 initiatives to improve efficiency. These include the installation of motion sensor LED lights, optimising air conditioning sequences, and reducing equipment operating hours to cut energy waste.

“Through these efforts, direct energy from diesel consumption was reduced by 50% compared with 2022, avoiding an additional 2.19 tCO2e (tonnes CO2 equivalent), showcasing our dedication to reducing both costs and carbon emissions,” Sabrina notes.

Balancing business performance with stakeholder returns has also been challenging. However, the company has integrated sustainability measures into its risk management and business continuity plans, ensuring that sustainability remains a priority even during difficult times.

“Despite rising costs, we remain dedicated to supporting our tenants and customers, especially given the increasing frequency of heatwaves affecting the region. Our malls are committed to providing assistance and ensuring the comfort of all visitors,” she adds.

To improve ESG adoption in Malaysia, Sabrina urges the government to enforce sustainability policies more rigorously and provide accessible incentives to the private sector to embrace environmentally conscious practices.

She emphasises the crucial role consumers play in making sustainable choices at home, adding that simple actions such as reducing energy consumption and minimising food waste can have a significant societal impact.

Sabrian explains that Hektar REIT’s sustainability performance is aligned with its business strategy and long-term growth. Investor support has been key in implementing ESG initiatives, and the company seeks continued backing for a sustainable and profitable future.

“Aligning with our sustainability goals for 2050, investor backing will enable us to drive both business and sustainability performance, ensuring economic growth alongside environmental and social responsibility.”

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.

      Print
      Text Size
      Share