Malaysian companies must be mindful of green goals or risk losing export strength, says AmBank Research

KUALA LUMPUR (June 3): Malaysian businesses should be mindful of green targets as 70% of local exports go to countries that have committed to net zero carbon emissions by 2040 to 2050, Malaysia itself aiming for 2050, AmBank Research said.

AmBank’s chief economist, Dr. Anthony Dass, said that currently the sectors that present a “very high” level of risk in terms of environmental, social and governance (ESG) risk are oil and gas, metals and mining as well as coal-fired power generation, which together contribute 10%. of the country’s gross domestic product (GDP).

He added that the chemical, refining and marketing, and agro-industry sectors, which contribute 17% to Malaysia’s GDP, are next in line for “high” ESG risk.

At the same time, it listed “medium” risk sectors: automobiles, technology hardware, environmental services, forestry, transportation, building materials, aerospace and defense, containers and packaging, property builders and developers, and intermediaries.

“We can see that 70% of our exports go to countries that are committed to net zero [carbon] emissions by 2040 and some by 2050. Malaysia is in 2050. Can you imagine Malaysian companies not committing to this, why should customers from outside buy from us? Dass said during a virtual market outlook briefing Friday, June 3.

“If the business is in the export market and not moving in that net zero direction, then your product is struggling, potentially, to generate more market share. And the supply chain that could be [made of] local national actors will also be affected. In the longer term, this would be a strong negative for Malaysia. »

He said the Malaysian government is also moving towards sustainability and ESG development.

“Green financing is the way forward. We work closely with Bank Negara Malaysia (BNM) and with Bursa Malaysia, the government is moving towards sustainability, ESG. To achieve this, we develop policies.

“The BNM is pushing hard on green financing. And our commitment with Bursa is that Bursa has a roadmap for listed companies to see how they move towards ESG, raising capital through green financing,” Dass said.

He recommended companies in the automotive industry to position themselves on electric vehicles (EVs), as Malaysia aims to have EV charging stations all over the west coast of Peninsular Malaysia and some on the east coast of Malaysia. here 2030.

He also pointed out that globally by 2040, 90% of vehicles are “assumed” to be electric vehicles.

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