Maybank Research assigns ESG score of 63 to Sime Darby Property
KUCHING: Analysts at Maybank investment Bank Bhd’s research arm (Maybank Research) has assigned an Environmental, Social and Governance (ESG) score of 63 out of 100 to Sime Darby Property Bhd (Sime Darby Property) under their proprietary ESG scoring methodology.
In a recent report, Maybank Research guided that the score is above average and that Sime Darby Property has relatively better disclosures compared to its peers but some of its quantitative parameters have been showing a decline in scoring.
“Sime Darby Property’s score was dragged by the rising trend in water and waste intensity under the Environmental segment,” the research arm said while adding that the increasing trend was due to higher construction activities.
Besides this, the research arm added that the group’s lost time injury frequency (LFIT) rate has also jumped in FY22 as there was a recordable fatality of a contractor worker in FY22.
On the bright side, the research arm notes that Sime Darby Property has put in place several initiatives that are expected to help curb water consumption and waste generation in the longer-term.
These initiatives include the use of home designs that incorporate water efficiency through rainwater harvesting, the use of water saving fixtures and plants, and the use of green label construction materials from forestry products.
Sime Darby Property aims to install 30,000 water saving fittings in its residential units by 2030 and in FY22, it managed to beat its annual target of 2.5k units with 3,948 units installed.
Besides this, the group has also invested more than RM100 million in the Northern Corridor’s Integrated Water Supply Scheme and have launched the Elmina Rainforest Knowledge Centre that focuses on conservations, R&D, environmental education, eco-tourism and community engagements.
For disclosures, the research arm guides that Sime Darby Property has relatively better disclosures compared to other developers under their coverage and that they have clearly outlined their medium-term ESG targets in FY222.
“Sime Darby Property has begun developing its Net Zero pathway with a strategic partner to chart its carbon footprint reduction, focusing on its operational carbon Scope 1 and Scope 2 before establishing a baseline for Scope 3 in 2023,” they shared.
With unbilled sales of RM3.6 billion at the end of 2023 and an above average ESG score, Maybank Research guided that they continue to like SDPR due to its large exposure in the landed and industrial property segments as well as its healthy balance sheet with 0.22-times net gearing as at 4Q23.