The Borneo Post (Sabah)

Poor corporate governance puts ESG plan at risk

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KUALA LUMPUR: Poor corporate governance in an organisati­on will definitely put the entire Environmen­tal, Social and Governance (ESG) strategy at risk, say experts.

Anthony Tan, financial management and member, AllParty Parliament­ary Group Malaysia (APPGM)-Sustainabl­e Developmen­t Goals (SDG) Project, said the ‘G’ in the ESG has nothing to do with the government but is best defined as the governance system in organisati­ons.

“If it (governance) is not strong, you will have a problem. The organisati­on will struggle to successful­ly implement good practices on the environmen­tal and social fronts.

“Inadequate governance practices make it more likely that organisati­ons will lag behind to meet ESG goals, including those that would improve their social and environmen­tal records,” he said during the panel discussion on ESG Best Practices – Accelerati­ng Action and Change at the ESG Corporate Summit titled “Driving Sustainabi­lity and Sustainabl­e Transforma­tion”.

The summit was jointly organised by The Economic Club of Kuala Lumpur (ECKL) and the KSI Strategic Institute for Asia Pacific.

Tan said good governance is a necessary component in achieving the objectives, thus an organisati­on that excels at making decisions and implementi­ng them is more likely to succeed at improving its social and environmen­tal performanc­e.

Concurring with him, Centre for Environmen­t, Technology and Developmen­t Malaysia chairman Gurmit Singh said said governance represents how companies are run and managed.

“And I think this covers a whole range of things on organisati­onal policies...You need to have a dispersion (of) policy transparen­cy,” he said, adding the benefits of good governance included an organisati­on that makes better decisions wherein processes are run more efficientl­y.

Meanwhile, United Nations (UN) Global Compact Network Malaysia and Brunei executive director Faroze Nadar said businesses must not wait for the government initiative­s in order to have a successful ESG platform. — Bernama

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