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MALAYSIA may be in the infant stage of adopting environmental, social and governance (ESG) practices, but we are flourishing among our Asean counterparts.

The nation’s ambition to achieve carbon neutrality by 2050 highlights a progressive position relative to other Asean countries.

This ambition is supported by five pillars in deploying renewable energy (RE) managing carbon emissions, water and waste; driving the development of sustainable cities; and accelerating the green economy.

Companies are also actively pursuing their ESG programmes. Multinational corporations have set energy consumption as a key area in their ESG commitment.

Green energy

Large local companies, at the launch of the Green Electricity Tariff in November 2021, are opting for electricity supply from RE sources generated from solar and hydro power.

A dedicated category for the commercial and industrial sector allocation of 300MW of solar quota under the Net Energy Metering (NEM) Nova programme was fully taken up, only after three months of its inception in April, 2021.

'Policy developments to mainstream sustainability themes augur well for the advancement of ESG in Malaysia,' said Kok.

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NEM Nova is a programme for commercial and industrial users of electricity to install solar photovoltaic systems for self-consumption and allows excess electricity to be exported to the national grid at system marginal price.

Government-linked companies are exploring the green energy option with major real estate developers.

To achieve sustainable city status, the low carbon city framework under the 12th Malaysia Plan targets to decarbonise over 30 cities first, followed by another 120.

Electric vehicle (EV) incentives were proposed under Budget 2022 to support the implementation of the low carbon mobility blueprint, including the full exemption of import and excise duties and sales tax for EVs.

Malaysia aims to deliver 31% of RE in the national capacity mix by 2025, and 40% by 2035.

“Better speed of implementation is needed to transition to a low-carbon energy system through solar, hydro, bioenergy and new sources,’’ said Ernst & Young Consulting Sdn Bhd Malaysia Climate Change and Sustainability Leader and Partner, Arina Kok.

Malaysia also plans to introduce a hydrogen economy and technology roadmap, which will widen the sources of green energy.

Carbon neutrality

A key theme of the 12th Malaysia Plan is “advancing sustainability” which outlines its aspirations to become a carbon neutral country by 2050, and puts Malaysia as among the earliest in Asean to support this climate action.