PwC Malaysia: COVID-19 a wake-up call to address sustainable practices
KUALA LUMPUR,. The COVID-19 pandemic has been a wake-up call to address the need for more sustainable practices among businesses, said PwC Malaysia.
Executive chairman Datuk Mohammad Faiz Azmi said this is an opportunity for corporates to build trust with their stakeholders by showing their commitment to addressing environmental, social and governance (ESG) issues before it’s too late.
“Businesses are reflecting on their purpose and how they measure their impact — should this be based on profit alone or are there social and environmental metrics that should matter?
“A combined effort from businesses, the government, and the public is needed to drive improvements in environmental and social practices. We are pleased to see that the Malaysian government’s commitment to accelerating the sustainability agenda is reflected in the recent Budget 2021,” he said in a statement today.
However, the ESG has yet to become a core focus for companies, noted the accounting firm.
PwC’s Sustainable Development Goals (SDG) Challenge 2020 found that although 73 per cent of Malaysian companies mentioned the SDGs in their reporting, only 20 per cent per cent had included the SDGs in their published business strategy.
In its latest publication titled “Rethinking ESG in a post COVID-19 World”, PwC Malaysia identifies several factors driving the call for sustainability and how businesses can get ready to meet the sustainability challenges ahead.
The key catalysts are investor expectations, sustainability reporting, regulations, fiscal policies and customer behaviour.
PwC Malaysia said there has been an increasing need to address scrutiny and adverse public reaction over environmental and social concerns in several sectors, especially when they are subject to more stringent foreign regulations.
Meanwhile, PwC Malaysia sustainability and climate change leader Andrew Chan said corporates are missing an opportunity to craft their own sustainability narrative if they are not proactive in communicating how they are doing business responsibly as a competitive advantage.
He stressed that companies need to ensure that material ESG risks, opportunities, and strategic decisions are consistently and transparently disclosed to all stakeholders through their reporting exercises.
“Studies have shown that investors turn to public information and third-party research when they assess companies’ ESG practices, instead of only communications or filings from the companies themselves. Much of this third-party information may be unverified,” he added.