A diverse group of Johor business leaders representing key economic sectors in the Southern state had convened earlier this week to discuss the future of sustainability reporting in transitioning to a more sustainable business landscape.
The CEO roundtable, themed ‘Energising Change: Robust reporting frameworks as strategic pathways to transition’, was organised by UN Global Compact Network Malaysia & Brunei (UNGCMYB) (Johor office) in collaboration with PwC Malaysia (Johor office) as a side event of the Asia Pacific Climate Week (APCW) 2023 in Johor Bahru.
In line with the focus of APCW, the roundtable discussion delved into four key issues crucial to shaping the first ever Global StockTake led by the United Nations Framework Convention on Climate Change (UNFCCC), that will conclude at the 2023 United Nations Climate Change Conference (COP28) in Dubai, United Arab Emirates. Four thematic tracks, with implications to the private sector, framed the roundtable discussion:
- Energy systems and industry
- Cities, urban and rural settlements, infrastructure and transport
- Land, ocean, food and water
- Societies, health, livelihoods and economies
Edey Suresh, Board Member and Johor State Director of UN Global Compact Network Malaysia & Brunei (UNGCMYB) commented, “It’s a timely opportunity for Johor’s key business leaders to be part of the dialogue at the Asia Pacific Climate Week 2023. The CEO roundtable serves as an important platform to underscore the indispensable role of sustainability reporting in supporting a globally aligned framework, such as the International Sustainability Standards Board’s IFRS S1 and IFRS S2.”
“By fostering sustainable business practises, we aim to catalyse positive environmental and social impacts within private sector actors, driving a significant transition towards a more resilient and responsible business landscape in Johor. Through this collaboration with PwC Malaysia, we are confident that the perspectives shared by the Johor CEOs can contribute overall to the Global Stocktake (the first ever assessment of global climate action under the Paris Agreement).”
The roundtable, moderated by Manohar Johnson, Assurance and Sustainability Partner at PwC Malaysia (Johor office), and Sharath Martin, Senior Policy Consultant at ACCA Asia Pacific, discussed a number of crucial issues defining the sustainability reporting landscape in Malaysia, with case studies and best practices shared.
The issues discussed included the role of robust reporting frameworks, where organisations are in addressing the social (S) considerations in their sustainability reporting agenda or in aligning their performance measures to the key performance indicators (KPIs) of management personnel, and expected investment costs in meeting their reporting requirements, among other topics.
“Our decision to organise the CEO roundtable in collaboration with UNGCMYB was driven by the State government’s move to pave the way for a greener future for Johor including the launch of the Johor Green Deal,” said Manohar.
“In a poll we ran among the roundtable participants, a commendable 44% mentioned that in the context of energy, transport, land, water, and health, 5% to 10% of these priorities are tied to their organisation’s key management compensation as part of their sustainability disclosures. We also note that 67% of the CEOs polled, anticipate less than RM5 million in investment costs around people, systems, and processes over the next 1 – 3 years to meet their sustainability reporting requirements.”
“While the interest shown by CEOs and investors in the four thematic tracks throughout the Asia Pacific Climate Week is an early indicator of our progress in preparing for the adoption of harmonised reporting standards, there is room for improvement. Having these dialogues will promote collective action among the business community as they navigate their aspirations and challenges,” he said.
An output report has been prepared, summarising the discussions from the roundtable, for submission to the United Nations Framework Convention on Climate Change (UNFCCC) to be included as part of the Global StockTake, which will conclude at COP28.
The Global StockTake is a process for countries and stakeholders to see where they are collectively making progress towards meeting the goals of the Paris Climate Change Agreement and where they’re not. Delivering a stocktake outcome at COP28, with specific pathways and concrete milestones and targets can help narrow gaps in achieving the Paris Agreement; notably around cutting emissions, adapting to the worsening effects of climate change, and providing finance and support to developing countries.
The International Sustainability Standards Board (ISSB) mandate is to develop and issue a comprehensive global baseline of sustainability reporting standards (IFRS Sustainability Disclosure Standards) for consistent, comparable and high-quality sustainability reporting designed to meet investor needs. IFRS S1 and IFRS S2 are the first of these standards to be issued. The IFRS Sustainability Disclosure Standards are structured on the Task Force on Climate-Related Financial Disclosures (TCFD) four-pillar approach: governance, strategy, risk management, and metrics and targets.
IFRS S1 and IFRS S2 are effective for annual reporting periods beginning on or after 1 January 2024, with early adoption permitted. This is subject to the endorsement of the standards by local jurisdictions.
The Asia Pacific Climate Week (APCW) 2023, the fourth event in a series of Regional Climate Weeks this year and the last major United Nations Framework Convention on Climate Change (UNFCCC) meeting before COP28, was held in Johor Bahru, Malaysia, from 13 to 17 November 2023.