Local telcos enable better ESG practices

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  • 28 Jun 2021
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Local telcos enable better ESG practices

Malaysian telecommunications companies (telcos) act as an enabler of better environmental, social and governance (ESG) practices for other sectors in the country due to the lack of serious sustainability issues or risks tied to their operations. CGS-CIMB Securities Sdn Bhd analysts Foong Chong Chen and Sherman Lam Hsien Jin noted all four listed telcos, namely DiGi.Com Bhd, Telekom Malaysia Bhd (TM), Maxis Bhd and Axiata Group Bhd, have final scores above the midpoint, indicating the sector as a whole performed well from an ESG perspective. “The provision of increasingly better or more innovative information and communication technology solutions reduces the need to travel (lower carbon emissions), and enables greater digitisation (reducing paper waste) and automation (greater efficiencies, power savings). According to the GSM Association, a global industry organisation, the level of avoided emissions enabled by communications technologies was 10 times greater than from the network themselves in 2018,” the analysts stated in a report recently. Telcos’ performance in several sustainability issues may influence longer-term market outcomes, pose risk of future disruption or if they are positioned well, they may create new growth opportunities. Foong and Lam highlighted key material matters for telcos, namely reliability and affordability, network quality of service (QoS), data privacy and security, human capital, digital and financial inclusion, corporate governance and environmental impact. Based on the highlighted key material issues, CGS-CIMB selected Digi as its top-ranked ESG telco, followed by TM, Axiata and Maxis.

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The Malaysian Reserve