TH Plant sees below average ESG rating
The team with Maybank Investment Bank Bhd (Maybank Research) has pegged TH Plantations Bhd’s (TH Plant) overall environmental, social and governance (ESG) score at 35 out of 100, which is well below average.
“We opine TH Plant needs to do more in terms of data collection, disclosures and commitment towards its sustainability goals, alongside its priority to raise profitability and lower gearing,” it said in its analysis yesterday.
To note, TH Plant has battled with frequent changes at its Board and senior management levels over the past several years, posing a challenge to its sustainability advancement.
“Also, TH Plant’s focus over the past several years has been on de-leveraging given its substantial net debt of RM822 million and another RM300 million in perpetual sukuk (as at December 31, 2023).
“For several years now, THP has earmarked more than RM700 million worth of its assets for sale to de-leverage but without much success.”
Maybank Research saw that the issue with TH Plant is its lack of ESG goals.
Right now, TH Plant is not a member of the Roundtable of Sustainable Palm Oil (RSPO) but its Malaysian operations are 100 per cent MSPO certified.
It has a sustainable palm oil policy announced back in 2020 that broadly tracks industry leaders, with a commitment on “no deforestation, no peat, no exploitation” (NDPE).
However, TH Plant stopped short of making known its medium and long term ESG targets.
“Over the years, we note that TH Plant has taken many initiatives in making its business ESG friendly.
“Among others, TH Plant is equipping its mill with a biogas plant, installing solar panels in support of its renewable energy agenda, re-purposing its biomass residue, and has embarked on a seven-year (2022-2029) conservation and restoration project to rehabilitate the degrading forest in Johor.
“However, more needs to be done – in addition to making its ESG targets known, TH Plant should publicly make available its ESG data points and metrics to enable the tracking of its ESG progress.”