+ | - | reset

Malaysia is the First Country in Asia to Launch a National Chapter of the World Economic Forum’s Climate Governance Initiative (CGI)

13 May 2019

KUALA LUMPUR Monday 13 May, 2019 – The Malaysian Chapter of The Climate Governance Initiative (CGI) will be launched on Thursday 16 May 2019 at the Securities Commission by Minister of Energy, Technology, Science, Climate Change, and Environment, Yang Berhormat (YB) Yeo Bee Yin.

The Malaysian Chapter, initiated by a group of Non-Executive Directors (NEDs) who sit on the boards of various Bursa Malaysia-listed companies, will be the first formally constituted country-level chapter in the world.

The Climate Governance Initiative (CGI) aims to encourage NEDs to acquire the practical skills needed as long-term stewards of the business to help steer their companies through an effective climate transition strategy, taking into account the need for financial stability, increased resilience and sustainability.

A project originated by the World Economic Forum, CGI intends that country-level Chapters will be established around the world to facilitate the emergence of a network of skilled and engaged NEDs.

For this purpose, a set of CGI Principles has been developed in collaboration with PWC to be used to assist directors in deepening their awareness of the implications of climate change for the businesses on whose boards they serve and to equip them with the necessary skills to play a constructive role as stewards of their companies.

The CGI Principles are consistent with the aims of the Task Force on Climate-Related Financial Disclosure (TCFD, led by Michael Bloomberg), and sets out a comprehensive and ambitious standard for directors to address what the 1,000 top global experts from business, academia and civil society have now rated as the top financial risk facing society for 2019.

Increasingly, there is a need for businesses and their boards to identify and disclose which climate risks have a financially relevant impact on their business, and take appropriate action to ensure the resilience of both their companies and the natural environment on which they depend.

This announcement comes ahead of the launch of the Climate Governance Initiative – Malaysian Chapter which seeks to build capacity of local NEDs through workshops, conferences and the sharing of written materials, leveraging on the collective expertise of NEDs as well as bringing in subject matter experts in risk management, strategic, financial and human capital planning, remuneration, and legal and governance models.

The Malaysian Chapter will work in cooperation with pre-existing business bodies, and will serve as the main contact point between its Malaysian members and the World Economic Forum, fellow international Chapters, as well investors and other key stakeholders.

The Malaysian Chapter of the CGI will be hosted by the Institute of Corporate Directors Malaysia (ICDM) as part of their broader mandate to provide continuous professional development for Directors within Malaysia. Greater appreciation, understanding and integration of CGI principles in businesses comprises a subset of ICDM’s efforts to effect a mindshift within Boards and Directors in Malaysia.

“The launch of the Malaysian Chapter of CGI is timely. By building on the strong footing of the Sustainability framework, ICDM looks forward to working with our industry partners to raise the climate competence for corporate boards. Not only are Boards of Directors responsible for the long-term stewardship of their companies, they have the opportunity to be catalysts for positive change, especially in the adoption of values and principles that will improve the competitiveness of an organisation,” says Ms Michele Kythe Lim, President / Chief Executive Officer of ICDM.

She also cited the recent Asian Corporate Governance Association (ACGA) Corporate Governance Watch 2018 report, which highlighted that whilst sustainability efforts are now underway in Malaysia, there are areas for improvement especially in the more effective management of climate-related issues and the need for an integrated view on sustainability matters from a financial and non-financial perspective.

This call to action is not new, as increasing awareness of climate and environmental change impacting the socio-economic fabric of society is being discussed on various platforms.

Malaysia, under the leadership of the Securities Commission Malaysia (SC) is driving efforts for the convergence of Islamic and green financing. This was demonstrated by the introduction of the Sustainable and Responsible Investment (SRI) Sukuk Framework by the SC in 2014, which has seen a total of five green SRI sukuk issued with RM2.4 billion raised as at 2018, including the issuance of the world’s first green sukuk in 2017.

Recent efforts with international networks include a discussion paper for policy makers and other stakeholders in Kuala Lumpur by the OECD Asia Corporate Governance Roundtable at the end of 2018.

At the Asean level, the ASEAN Working Group on Climate Change (AWGCC) held its first ASEAN Climate Change Partnership Conference in mid 2018, pulling together ASEAN sectoral bodies, dialogue and development partners, and the private sector.

It is now time for the Board of directors of companies, especially Non-Executive Directors, to also be adequately informed about the risks arising from climate change, so that they can start to proactively manage such risks, as a collective, and also to recognise and embrace the underlying opportunities. While addressing environmental and climate change at a sectoral level may work in the short term, there needs to be a higher level of discussion and collaboration for the longer term if we want to address the financial and sustainability risks.

“I would like to hear a declaration of commitment from the boards of all listed companies, starting with Bursa Top 100 companies, that they will put climate change and its risk and impact on their Board agenda”, said Datin Seri Sunita Rajakumar.

“In order to be effective stewards of their companies, boards must be prepared to act as catalysts for change and climate action, both within their operations and as responsible actors in society”, said Karina Litvack, NED of a major European Oil & Gas company, who has long led the call for boards to take the initiative as the prominent custodian agents and fiduciaries in corporations.

The World Economic Forum has an online platform to share materials and information with NEDs, business leaders, NGOs, academics and other experts in relevant aspects of climate governance. Chapters can utilise this platform to facilitate contact between directors and stakeholders; share information about events, materials and other developments; organise workshops and other events in their local markets; as well as cooperate with Chapters in other countries to enable NEDs to take part in cross-border events.


The Climate Governance Initiative (CGI) is an effort to reach out specifically to non- executive directors (NEDs) to inform, engage with, and develop responses on how businesses might address longer term risks of climate change, including a more sustainable allocation of capital.

For additional information, please email [email protected] or contact: Sharmila Sekarajasekaran at 019-2330087 (for media inquiries). Dr Kalanithi Nesaretnam at [email protected] (for support and funding)


Survey

ICDM
Homepage

ICDM