Meaningful change requires every individual’s input, PETRA chairman opines
Published by The Vibes
KUALA LUMPUR – Companies that embark on achieving environmental, social and governance (ESG) goals should not see it as merely a “box-ticking exercise”, but must be motivated to implement them for the good of the society and environment.
This was the key message delivered by industry experts during a panel discussion on ESG in Your Business DNA: Strategy and Innovation Driven by Leadership and People at the ESG Evolve 2022 event organised by Kexxel Group yesterday.
PETRA Group chairman and chief executive Datuk (Dr) Vinod Sekhar said it is one of his biggest fears that, despite issues of ESG reaching its tipping point, some organisations are treating it as mere corporate social responsibility (CSR).
“CSR is crap. It’s absolute nonsense. We take a good idea, we implement it, and say, ‘I’m done’. Box-ticking…that’s the most dangerous thing we face today.
“We don’t realise the real magnitude of the problem, or we do realise it, but don’t see how it affects us and what it’s going to do to us and our children.”
Others present at the panel session moderated by Korn Ferry Malaysia managing director Prashant Chadha were Kenanga Investors Bhd executive director and chief executive director Datuk Ismitz Matthew De Alwis and Cenviro group managing director Johari Jalil.
For Vinod, the success of a company in implementing meaningful changes on the ESG front would depend on the contribution of each individual within an organisation.
He said beyond just listening to and understanding the issues at hand, every individual should “get involved and do something”.
“You need to start with yourself.”
As for his own conglomerate PETRA Group, Vinod said the key to evolving his team’s mindset and ensuring they are motivated to carry out the ESG goals is leadership by example.
“If you don’t make everyone feel that they can be part of a solution, they won’t evolve themselves.”
Beyond this, he said leadership quality is also crucial in explaining to and inspiring confidence among stakeholders and investors on why addressing ESG requirements is more beneficial for them from the perspective of growth, longevity and sustainability.
Vinod went on to compare the implementation of ESG goals to playing a game of chess rather than checkers, reminding business leaders that ESG is a long game that requires time to be accomplished and cannot be done overnight.
“In a game of chess, you might need to give up a pawn, but at the end of the day, we want to win the whole board.
“Chess takes time (to win), not immediately. In the longer term, we come out on top.”
Vinod also honed in on the importance of getting the balance right when implementing ESG strategies.
One example, he said, is that when operating a company, it is vital to have a good working environment, with staff being paid decently while also doing business in a way that does not kill the natural environment.
Ismitz echoed Vinod in saying that companies should not merely implement ESG strategies for the sake of ticking boxes but not truly accomplishing sustainable business models.
He noted that when Bursa Malaysia introduced its sustainability reporting guide in 2006, many companies had jumped on the ESG bandwagon without properly thinking through on implementation strategies.
“Some came up with CSR programmes, but sustainable business is not based on that. It’s how you think your strategies and governance lead to a sustainable model.”
Ismitz said when it comes to ESG goals, companies should also not set targets that could take an extremely long period to accomplish, effectively placing the burden on their future successors, but should instead be doable within the near future.
Additionally, he advised organisations not to be too hard-pressed about achieving some of the ESG standards set out by the European Union, which he said is at a different development stage from Malaysia.
“What is most important is where do we start, and how do we localise it? We need to take baby steps. We see some organisations (having) made a lot of effort to meet those standards, (while) some gave up halfway.
“What I’m trying to say is, you need to start somewhere. (You) don’t have to set such a high standard; take baby steps. It won’t happen overnight.” – The Vibes, December 7, 2022