The past two years have been incredibly challenging for citizens, businesses, organisations and also world governments, due to the COVID-19 pandemic.
Nevertheless, coronavirus vaccines offer hope to fighting the health crisis. The toolkit for tackling COVID-19 is also constantly growing, such as Pfizer’s COVID treatment pill – which was granted emergency authorisation in the United States late last year.
Unfortunately, the pandemic is far from over with Omicron infecting record numbers of people in the United Kingdom and France recently. However, some economies around the world are slowly starting to open up again and decision-makers are strategizing and preparing for a post-COVID recovery.
The United Nations Department of Economic and Social Affairs (UN DESA) at a 2020 online event urged that “we must build back better, greener and fairer.” The UN agency then referred to the Sustainable Development Goals (SDGs) as “our ‘policy vaccine’ for the worst effects of COVID-19.”
The message was again amplified at the 2021’s UN Climate Change Conference (COP26) in Glasgow, United Kingdom – which highlighted the links between COVID-19 and the SDGs, reinforcing the need for bold action in the recovery process.
The COVID-19 pandemic has emphasised the need for a renewed focus on achieving the 17 SDGs. It has been a wake-up call to address the need for more sustainable practices, including in corporations and businesses.
Many organisations are now rethinking their purpose as they move towards post-COVID recovery. They are now reflecting on how they measure their impact - either by profit alone or other metrics such as social and environmental.
An Environmental, Social and Governance (ESG)-focused recovery is considered to be one of the few effective directions that organisations and corporations can take in building back better. The consequences of not properly considering, anticipating and managing ESG issues are too great to be simply ignored.
Hence, ESG criteria are increasingly shaping the global corporate agenda and helping to provide valuable insights that create long-term value for stakeholders.
ESG stands for Environmental, Social and Governance, and refers to the three key factors when measuring the sustainability and ethical impact of an investment in a business or company.
The Financial Times Lexicon defines ESG as “a generic term used in capital markets and by investors to evaluate corporate behaviour and to determine the future financial performance of companies.”
It adds that ESG “is a subset of non-financial performance indicators which include sustainable, ethical and corporate governance issues such as managing a company’s carbon footprint and ensuring there are systems in place to ensure accountability.”
ESG: Not Just A Buzzword At Sunway
At Sunway – one of Southeast Asia's leading conglomerates – the value of ESG is exemplified through sustainability efforts, risk management and risk mitigation to prepare for all eventualities.
Sunway has a diverse portfolio covering real estate, property investment and REIT (real estate investment trust), healthcare, education, hospitality, leisure and others.
Even before its introduction by the Malaysian Stock Exchange, Bursa Malaysia in 2014, ESG criteria have already underpinned Sunway’s business philosophy. In a way, it has been embedded in their corporate DNA.
ESG is not just another “buzzword” at Sunway. It is distilled into the organisation’s Environmental, Social and Governance compliance framework that seeks to communicate the Group’s sustainability strategy and vision towards creating long-term value for investors and other stakeholders.
“As Sunway is deeply committed to advancing the sustainable development agenda, we have aligned our material ESG issues to the 17 United Nations Sustainable Development Goals (UN-SDGs),” said Mr Ong Pang Yen, executive director of chairman’s office at Sunway.
“At Sunway, we see the ESG measurements and compliance framework as one of the more effective tools and as a “means to an end”, which is the UN-SDGs,” he added.
“ESG is not an ‘end’ in itself. It would be a mistake to pursue ESG in that manner and miss out on the SDGs. The tools can and may change, but the goals remain. Today, ESG is more of a regulatory instrument, to raise awareness and to promote compliance by corporations for a very good reason, i.e., pushing corporate citizens towards collectively achieving the SDGs in a corporate language that all can understand – compliance.”
ESG has increasingly become a focus for investors and regulators these days, especially since the pandemic. In Malaysia, ESG compliance came into prominence in late 2014, with the introduction and launch of the FTSE4Good index by Bursa Malaysia. Listed companies get to be on the constituent list if they comply with the ESG disclosure requirements.
However, before ESG, “the buzzword for many companies and corporations was ‘CSR’ or Corporate Social Responsibility, which means giving back to society to make it more equitable and a better place for all,” explained Mr Ong.
According to the UN Industrial Development Organization, Corporate Social Responsibility (CSR) is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. Key CSR issues include environmental management, eco-efficiency, responsible sourcing, stakeholder engagement, labour standards and working conditions, employee and community relations, social equity, gender balance, human rights, good governance, and anti-corruption measures.
Mr Ong of Sunway believes that CSR is "a good and necessary thing for a corporation to demonstrate its value system, conscience, culture and business philosophy.
“The point I would like to make here is that CSR is outward-looking. We see the need out there and we try to meet those needs to make our society a better place for all.
ESG, on the other hand, is ‘inward-looking'. We see a changing world and we need to see how best we can adapt and prepare for it, internally, so as to remain relevant and sustainable,” Ong explained.
CSR and ESG are related but not the same. A report by RHTLaw Asia, a regional law firm headquartered in Singapore, suggests that without CSR, there would be no ESG. While CSR aims to make a business accountable, ESG criteria make such business’ efforts measurable.
“For us, ESG is not merely a compliance matter, or merely to please investors so as to attract their funds. It is a matter of being well prepared, to do the right thing. It is to remain relevant and stay sustainable, a matter of ‘self-preservation’ and ‘survival’, if you will,” added Ong.
Sunway is on a mission to make the sustainable development agenda a reality with both, ESG considerations as well as its award-winning CSR initiatives.
Tan Sri Dr Jeffrey Cheah, founder and chairman of Sunway Group once said “in all that we do, we must improve the quality of life and society, contributing towards making our community and nation a better place for future generations.”
Despite the profitability of certain industries, he has always chosen the path to healthy nation-building – avoiding industries such as gambling, as well as advocating a smoke-free society – which promotes Goal 3 of the SDGs (Good Health and Well Being).
Sunway’s business model and culture is centred around an enduring purpose: to advance the way people live, sustainably. The Group embedded the 17 SDGs and ESG considerations into their pursuit of this goal.
For example, the ‘Social’ aspect of ESG has usually been associated with giving back to the community through their CSR initiatives. In April 2021, Sunway received recognition from the Malaysian government for the social impact of its CSR efforts.
In that year alone, Sunway garnered four awards for their CSR initiatives which included the Community CSR Award, Sustainability & CSR Malaysia Awards 2021 by Malaysia's Ministry of Women, Family and Community Development and Sunway Group Best CR Initiative by a leading regional publication.
Through its #SunwayforGood campaign, the Group successfully impacted more than 500,000 lives across the country and targets to touch millions of lives by 2030.
Sunway champions its CSR through three areas, namely Community Enrichment, Healthcare and Education, aligned with their commitment to the 17 SDGs.
The Malaysian conglomerate has partnered with a number of NGOs to achieve profound and lasting impact by giving back in ways that align with the unique needs of local communities, with special emphases on festive outreach, food aid programmes and relief efforts.
On 17 December 2021, Malaysia experienced extremely heavy rain which resulted in the country's worst floods in recent memory – forcing more than 60,000 people to flee their homes. Selangor, Malaysia’s most developed state, was the hardest hit. Sunway was among the first organisations to mobilise aid and provide warm meals to the community in flood-stricken areas throughout Selangor and other parts of the country.
In the healthcare sector, Sunway has committed almost RM60 million (about US$14 million) in the fight against the ongoing pandemic, having provided the Malaysian government with four vaccination centres spanning close to 200,000 square feet for free up to 12 months.
Other than that, the Group also collaborates closely with the Jeffrey Cheah Foundation to bring quality education within reach of individuals facing ongoing barriers to learning opportunities.
Sustainability Agenda And The Road To Net-Zero
In recognition of the Group’s full embrace of the sustainability agenda and commitment to advancing the SDGs in Asia, Sunway City Kuala Lumpur was chosen as one of three overarching United Nations Sustainable Development Solutions Network (SDSN) centres alongside New York City and Paris to coordinate continent-wide sustainability initiatives for Asia, the Americas and Europe as well as Africa, respectively.
Based at the Jeffrey Sachs Center on Sustainable Development (JSC) at Sunway University, the SDSN Asia office aims to strengthen SDSN’s impact in the region.
The Network has grown rapidly in members and in scope and ambition in its research and advocacy activities. Some of the programs being implemented include; the ASEAN Green Future, which is a regional project that aims to accelerate action for decarbonisation to achieve net-zero by 2050 in Southeast Asia; and Mission 4.7, which is a global initiative to achieve SDG Target 4.7, promoting Education for Sustainable Development (ESD) and Global Citizenship (GC).
The team at SDSN Asia will work closely with the Mission 4.7 Co-Chairs and leadership team to incorporate education in sustainable development and global citizenship in schools throughout Asia.
“All of us here at Sunway are determined to do our part towards advancing the sustainable development agenda in this part of the world. I am grateful to SDSN for establishing at Sunway University one of the three global SDSN centres to oversee continent-wide sustainability initiatives in Asia,” said Tan Sri Dr Jeffrey Cheah.
It is evident that in recent years, Sunway has made a strong commitment to advance the SDGs – through its ESG compliance framework, CSR initiatives, and also its acclaimed research centres.
However, to further enrich the Group’s ongoing efforts and expand its mission beyond the year 2030 – the establishment of the Sunway Centre for Planetary Health was announced on 23 September, 2021.
The new Centre’s aim is to provide a space to share knowledge about planetary health, translate academic discourse into easily accessible information, facilitate learning, and create solutions together with a broad range of stakeholders to effect lasting systemic change.
In its inaugural phase, it will focus on Asia and the Pacific; regions most vulnerable to the impacts of climate change and other planetary health challenges.
One of the Centre's priority themes is to tackle the climate emergency. This can be achieved by dramatically reducing carbon emissions and strengthening communities to adapt to climate change and its consequences.
In recent years, a number of countries and organisations have made net-zero carbon pledges. Singapore in 2020 pledged to halve its emissions from its peak by 2050 and just last September, Malaysia's prime minister Dato' Sri Ismail Sabri Yaakob announced a goal for the country to become carbon neutral "as early as 2050".
Other than the establishments of its multiple sustainability-related centres – Sunway has also stepped up its game to fight against global warming by joining a 1,700-strong coalition of organisations globally to support the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). This entails providing support for the goals of the Paris Agreement to limit global warming to below two degrees Celsius compared to pre-industrial levels and aims to achieve a carbon-neutral world by 2050.
Sunway aligned its material ESG issues to the 17 SDGs as part of the Group’s strategy for long-term success and economic value. Viewing the TCFD as a strategic tool for engagement between its group of companies and investors, Sunway believes the climate disclosure recommendations will help identify and assess risks posed by climate change.
Sunway And The Future Ahead
International organisations such as the Organisation for Economic Co-operation and Development (OECD) and the Asian Development Bank (ADB) have called for a ‘green recovery’ to ensure a sustainable and resilient return to growth and development after COVID-19. As we move towards post-COVID recovery, striving for the Sustainable Development Goals are especially relevant.
For Sunway, it has always been about prioritising sustainability since its inception in 1974, long before sustainable development rose to its current prominence as a global concern.
The Group’s vision to be Asia’s model corporation in sustainable development and to enrich lives for a better future is fast becoming a reality through its various CSR initiatives, ESG considerations and research centres, among others – which are all in line with the path charted by the 17 SDGs.
The very foundations of Sunway are based on the concept of sustainable development, beginning with the transformation of its flagship Sunway City Kuala Lumpur from a relative wasteland into a smart sustainable city today.
Despite the unprecedented challenges over the past two years that have caused significant disruptions to the Group’s businesses, the commitment to its sustainability journey remains firm.
“For the Group, the motivation is inherent and deep-rooted. It is about doing the right things the right way. It is reflected in its business philosophy and its core values of Integrity, Humility and Excellence,” said Ong.
Along with Sunway’s commitment to advancing the sustainable development agenda, the Group has committed to achieving net zero emissions by 2050.
Aiming to gradually cut its carbon footprint each year, Sunway is ready to accelerate and intensify climate action by implementing an internal carbon pricing to encourage carbon reduction initiatives across its 13 business divisions.