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SESB’s current ESG initiative
Published on: Sunday, May 19, 2024
By: Datuk Seri Panglima Wilfred Madius Tangau
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The overarching concern for climate change and the global boiling phenomenon, environmental awareness is now on a steep rise. Propelled by the Paris Agreement or the COP21 and the United Nation (UN) 2030 Sustainable Development Goals (SDG) there has also been a steady rise in responsible investing or what is now popularly known as Environmental Social and Governance (ESG).

Although ESG is now a global phenomenon it has been said that more than 81pc of such investments are in the European Union (EU) countries. Economic and financial investment has gradually taken environment and sustainability as a key performance indicator for assessing a company’s lifespan and profitability.

To be more specific, Environment, Social, and Governance(ESG) standards are now crucial for evaluating a business’s dedication to sustainable operations and good corporate citizenship. Shift in its perspective, expanding beyond a limited focus on profits and incorporating its broader impact on society and the environment.

Dissecting the three elements of ESG, environmental concerns assess a company’s effectiveness in minimizing its ecological footprint. On the other hand, governance gauges how effective and openly its leadership and management practices are, while social elements assess how well it interacts with communities and stakeholders.

How does this impact businesses like Sabah Electricity SdnBhd (SESB)? Well, it has been said that 40pc of carbon emissions are contributed by the energy sector.

So instead of being in a state of denial, SESB as business organizations with generation and supply of energy power as a core business we must embrace ESG and treat it as a core philosophy and strategic policies.

As the Chairman I must applaud and congratulate SESB management under the leadership of my CEO Ir. Mohamad Yaakub Jaafar for consistently embracing and incorporating ESG in our management and policies. For example, soon SESB should rebrand itself to portray our commitment to ESG. 

Such commitment is not only strategic but a bold move because moving forward it will entail additional cost and expenditures. But not going to ESG is no option. It is a strategic direction for SESB.

Such a strategic direction has been taken after carefully weighing our operations against environmental, social, and governance (ESG) concerns, such as carbon emissions and its economic, financial and investment implications. 

The banking sector for instance has largely embraced ESG and therefore their lending policies. No compliance to ESG, no borrowing kind of things.

So when one is confronted with the question of “Is ESG the solution?” And the answer is of course a resounding Yes. Given the sustainable benefits, these components and regulations ought to be implemented not just by the energy sector but by all other sectors such as industrial manufacturers.

It is within this context that as the Chairman of SESB I applaud and welcome the initiative taken by University Malaysia Sabah (UMS); Invest Sabah Berhad and; ESG Malaysia Sabah Chapter initiative to organize the recent ESG Forum held at a leading hotel in Kota Kinabalu.

Ever Since I took the initiative to established Invest Sabah Berhad, as the the Deputy Chief Minister cum Minister of Trade and Industry and became its first ever director I am proud that the management of Invest Sabah Berhad is promoting responsible investment by embracing ESG.

It is our hope that awareness and therefore compliance to the ESG fiduciary duty will propel the state’s transition to sustainable development and accountable governance. In today’s regulatory framework, power firms face more strict laws aimed at lowering fossil fuel consumption and carbon footprints.

This regulatory pressure makes ESG measures not only advantageous, but also necessary for compliance and long-term viability. Policies, operational guidelines, and technology that may be utilized to reduce the negative environmental effects of energy generation are examples of effective ESG initiatives.

Emission control is a significant concern that we in the energy sector must address first and foremost. Since fossil fuels continue to be a major source of power generation, CO2 emissions are still a major problem. Considering our aim to reach net zero emissions by 2050, this problem is very urgent.

The integration of cutting-edge technology and sustainable practices will be crucial in changing the energy landscape and lowering our carbon footprint as we work toward this challenging objective.

These include using renewable energy sources like solar and hydroelectric power, which greatly reduces dependency on fossil fuels and lowers overall greenhouse gas emissions which also contributes to a more stable and diverse energy system.

A notable ESG development is the use of Battery Energy Storage Systems (BESS).

These systems are critical for storing generated energy for later use, resulting in a stable power supply. BESS can be especially useful during high use periods and unexpected breakdowns of primary power sources, acting as a stopgap solution to maintain productivity and avoid interruptions.

SESB is now undertaking an example project in this respect at Lahad Datu. Once finished, this BESS project will provide an extra 100 MW of power storage capacity. This initiative not only improves the stability of Sabah’s power supply, but it also represents a significant step in integrating refined energy storage systems into the region’s energy infrastructure.

Recently, it was reported that in 2024, renewable energy accounted for over 50 percent of Sabah’s total energy production, marking a significant milestone in the region’s journey towards energy sustainability and independence.

This achievement demonstrates Sabah’s commitment to lowering its carbon footprint and increasing energy resilience via the use of clean and renewable energy sources.

For businesses operating in Sabah, adhering to the ESG principles is not only a moral requirement, but also a strategic necessity.

Having had the opportunity to take part in the University Malaysia Sabah (UMS) one-day seminar on ESG initiative awareness, it was highlighted that businesses that embrace sustainability and responsible governance may get significantbenefits.

It became clear that, in a market that is becoming more and more concerned with environmental issues, these businesses are better positioned to handle risks, draw in capital, and seize opportunities.

Businesses that integrate all of their activities with Sabah’s ESG objectives promotes long-term financial success and resilience in the face of new environmental and social concerns, in addition to improving corporate reputation and contributing to the state’s sustainable development plan.



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