15 March 2022

To my fellow Chairpersons,

This year marks the third year we are dealing with the COVID-19 pandemic. Since the SARS-CoV-2 was first detected, we have witnessed multiple variants of the virus that have posed different sets of challenges for our public health system and way of life. The fact remains, COVID-19 has altered the way we do business and live. As we learn to live with the pandemic, we have to start embracing a new normal and focus on the road ahead. We need holistic thinking that combines short-term measures that protect livelihoods with long-term value-creation solutions that can enhance the resiliency of our society.

The phrase “businesses do not exist in a vacuum” is certainly true in today’s context more than ever. Businesses represent a fundamental part of our society and can be a significant engine for change. At the same time, it is also important for businesses to take note of external realities that can influence their ability to create value and achieve success. A growth strategy that is anchored on sustainability can help businesses to identify emerging trends, respond to critical risks and adapt effectively to evolving stakeholder expectations and needs.

As key drivers of our economy, Public Listed Companies (PLCs) can play an important role to support the nation building agenda and help accelerate our road to recovery and economic success. Bursa Malaysia is focused on supporting our PLCs through our recently launched PLC Transformation Programme that will be focused on the following five important pillars for PLCs to deliver a high-performance corporate Malaysia:

1. To be purposeful and performance driven
2. To grow as sustainable, socially responsible and ethical organisations
3. To enhance stakeholder management and investor relations
4. To be digitally-enabled; and
5. To support the nation-building drive to advance the Malaysian economy and community

In line with our national plans to drive sustainable development, I urge all chairpersons to drive the sustainability and transformation agenda within your respective organisations. The PLC Transformation Programme is designed to support PLCs of all sizes and industries, and I encourage you to reach out to Bursa Malaysia to become an active participant of this programme. Given the diversity of our PLCs, there is a lot that we can learn from each other to advance best practices and improve our competitive edge locally, regionally and globally.

In December 2021, Malaysia experienced the worst flood in decades. Thousands of people were displaced from their homes and the socioeconomic damage was significant, estimated to the tune of RM6.1 billion in losses. More recently on 7 March 2022, severe flash floods and landslides hit Klang Valley again. This is consistent with global trends of severe weather events that are fueled by human-induced climate change. The planet has already warmed by 1.2ºC from the pre-industrial (1850-1900) baseline and we have a limited carbon budget to curb temperature rise and meet our globally-agreed target of 1.5ºC in order to avoid the catastrophic impacts of climate change.

We can no longer postpone action and we need urgent, sustainable solutions to cut down greenhouse gas emissions (GHG) as well as strong climate adaptation measures. Faced with this reality, the COP26 held in Glasgow in November last year saw renewed commitments from many countries to scale-up climate action to mitigate climate change. Malaysia too has pledged to raise its climate ambition to become a net zero GHG emissions country as early as 2050. We are also seeing an increasing trend of companies adopting net zero GHG emissions aspirations. As more countries and companies focus on carbon abatement measures to meet their respective targets, this will have a widespread impact on business norms. It should also be noted that a significant majority of Malaysia’s key trading partners have a net zero GHG emissions target which will have a significant influence on export demands in the future.

Thus, it is important that all companies ascertain their climate exposure and start measuring their GHG footprint across their value chain. Bursa Malaysia will be working closely with the Ministry of Environment and Water, Ministry of Finance, Ministry of Energy and Natural Resources, Ministry of International Trade and Industry as well as other relevant stakeholders to develop a Voluntary Carbon Market (VCM). As we develop this new ecosystem, we will ensure an inclusive approach to understand the needs and expectations of our PLCs and other companies in Malaysia. As more Malaysian companies transition towards low carbon business models, this will inherently improve our competitive edge as a trading nation, and we are committed to developing an enabling mechanism via our VCM. Further, the VCM will also play an important role in raising financing to support nature-based solutions and growth of technologies that can help Malaysia achieve Net Zero GHG emissions.

As sustainability or ESG (an acronym for environment, social and governance) issues enter mainstream, companies must understand their ESG-related exposures and impacts across their operations and supply chain. These factors will become increasingly critical to maintain a social license to operate, deliver products to markets and consumers and access capital to support growth and expansion. Given the strong regulatory push and investor demand for ESG considerations, companies must start developing their own strategies to remain competitive in a fast-changing business environment.

To help companies in their journey, Bursa Malaysia is committed to support capacity building through our various ESG advocacy programmes and our BURSASUSTAIN online learning platform that contains a repository of information, tools and guidelines on sustainability, corporate governance and responsible investment.

As Chairpersons of PLCs and stewards of companies, we have a unique position to influence change in mindsets and business behaviors. As we transition into this new era, let us use the lessons that we have learnt in the past to chart sustainable and inclusive strategies that can help deliver profitability, societal growth and environmental preservation without compromising one for the other.

I look forward to engaging with you further. Meantime, stay safe and all the best!

Yours sincerely,

Tan Sri Abdul Wahid Omar
Chairman
Bursa Malaysia Berhad