Bursa Malaysia, London Stock Exchange Join Forces to Launch Sustainability Reporting Platform | News | Eco business

Stock exchange regulator Bursa Malaysia is working with its counterpart in the United Kingdom to roll out a centralized sustainability reporting platform by next month, Malaysian Prime Minister Anwar Ibrahim announced.

“This [platform] will enable companies, both listed companies and unlisted small and medium-sized enterprises (SMEs), to calculate their carbon emissions impact,” Anwar said at Invest Malaysia 2023 on Wednesday. The annual investor conference, co-hosted by Bursa Malaysia and Maybank, was held at The St. Regis, Kuala Lumpur, Malaysia.

The joint platform is one of several latest initiatives highlighted in Anwar’s speech aimed at helping Malaysian companies keep pace with the growing global momentum in sustainable development. These include a commitment by the government to commit 10 million RM (US$2.21 million) in seed funding to act as an “assured demand” for Malaysia-generated carbon credits to “jump-start the market”, as described by Anwar, who said the government looks forward to companies optimizing Malaysia’s voluntary carbon market or the Bursa Carbon Exchange launched last December.

Speaking on the centralized sustainability reporting platform, Anwar said it will help companies disclose standardized shared environmental, social and governance (ESG) data in a way that meets established global standards.

“This platform has the potential to be a major boost to Malaysia’s pivot to green, and to support our sustainable development, while creating highly skilled jobs for our progression towards a high-income country,” he said.

Bursa Malaysia currently uses the FTSE4Good methodology to rank companies on its ESG index, called the FTSE4Good Bursa Malaysia index. The methodology was designed by global index provider FTSE Russell, owned by the London Stock Exchange.

The stock market regulator also rolled out an ESG advisory service last year that uses the methodology as a “transitional platform” to help publicly traded companies (PLCs) identify ESG risks and improve their disclosure and standards.

Chong Kok Wai, group head of legal affairs, compliance and sustainability at GHL Systems Berhad, a Malaysian provider of PLCs and payment solutions, said in a conversation with Eco-Business on the sidelines of the conference that the platform will be extremely beneficial to PLCs because it would potentially reduce the time spent liaising with non-listed suppliers (who are not part of the reporting framework) to measure and report emissions.

Chong said GHL Systems Berhad has partnered with supply chain providers and will ask those suppliers it comes into contact with to subsequently monitor their emissions. “With this platform, we can easily get them on board,” he said, emphasizing that reporting Scope 3 emissions or tracking indirect emissions along the supply chain is of most concern to the company, and that the new platform eliminates these woes could potentially reduce.

Chong expects consultants selling sustainability reporting advisory services, which are typically expensive, to lose out with the launch of the platform. “If the platform is free [and provided by] Bursa, that will result in cost savings for PLCs,” says Chong.

He believes there will also be a positive impact for SMEs. “We deal with many traders and SMEs. It will be great if they can all get together and start reporting. It is beneficial to the sustainability community.”

Phase out fossil fuels

Challenges in moving towards renewables and moving away from a heavy dependence on oil and gas were also discussed at the investor conference.

Economy Minister Mohd Rafizi Ramli, speaking at one of the panel sessions, warned that natural gas, on which Malaysia depends for power, is finite. “If we continue with the current gas consumption in our energy sector, there will come a point not too far in the future where we need to start thinking about LNG (liquefied natural gas) imports,” he said.

Malaysia has long relied on the oil and gas sector as a primary source of both energy and revenue. About 91 percent of the country’s energy comes from fossil fuels. It is the second largest producer of oil in Southeast Asia, and the world’s third largest exporter of LNG.

“The best way for us to reduce this dependence is to push for more alternatives and substitutes for gas,” Rafizi said. One option the state is looking at is the use of biomass energy – energy derived from organic material – in the case of Malaysia also from agricultural waste, palm oil and forest residues. “The technology is there and it’s in our system. It’s just that it used to be, in my opinion, left to the industry to make that decision.”

The government should play an increasing role in guiding Malaysia towards clean energy and remaining competitive, Rafizi said. This can be done in the form of larger incentives and subsidies. “If we left it to the market to spin itself and wait for organic growth, we wouldn’t be able to sustain the growth and pace we need to become a regional leader. [in green energy].”