Sustainable development typically forms through policies, projects and investments that deliver benefits today without compromising on the future environment, social and health. It is worth noting that numerous companies are getting on board with the Environment, Social, and Governance (ESG) agenda, acknowledging doing good is no longer an option but a necessity to not only tackle environmental and social issues but to also provide the opportunity to improve its status quo and expand their potential. For successful organisations, adopting ESG is no longer considered as a cost of doing business, but a critical function of their business strategy. An effective ESG is seen as an essential means to help grow businesses and better serve customers, communities, investors and the planet.
OUR COMMITMENT TO SUSTAINABILITY
Being among the region’s leading conglomerates, DRB-HICOM has always strived to be the leader in driving the sustainability agenda across all the business sectors, which is a philosophy we believed in and incorporate into all levels across the Group. DRB-HICOM’s efforts have focused to realize the UN Sustainable Development Goals (SDGs), with targets to:
- responsible consumption & production;
- good health & well-being;
- decent work & economic growth;
- affordable & clean energy;
- zero hunger; and
- climate action.
These commitments to meeting these targets and goals can be seen through our sustainability vision and mission, strategizing ourselves to be the frontrunner in meeting sustainable standards set by the nation and ensuring business activities are aligned with stakeholders’ expectations while also enhancing long-term value through sustainable initiatives respectively.
IMPORTANCE OF AN EFFECTIVE ESG FRAMEWORK
An effective ESG framework is essential for organizations to set clear guidelines and deliver within the committed boundaries. Given the global and local interest in driving progress, ESG now takes a front seat in steering the organization in the right direction. Factors which should be taken into consideration to have a strong ESG framework include but not limited to:
• Decarbonization – cutting down CO2 emissions footprint.
• Ethics – implementing ethical policies that support growth, shape a sustainable economic, and earn trust in stakeholders.
• Governance – which can support effective, transparent and responsible business conduct.
• Resource efficiency – using available resources responsibly to reduce consumption.
• Equity – to practice inclusivity and equity policies that helps in promoting a sense of belonging.
• Employability – investing vision for the next-generation workforce.
Our Sustainability Policy aligns with our vision and mission, indicating the Group’s commitment and responsibility to integrate sustainability principles throughout our business processes and strategies. It applies to a wide scope, from products and services, operations, subsidiaries, and across our supply chain.
Built on a strong foundation of corporate governance, the Group’s sustainability principles are infused in everyday business decision-making, ensuring business practices are conducted responsibly, proper management of the environmental impact of our operational activities, inclusivity workplace for our community and meeting the demand of the community we serve. A strong ESG will produce many positive outcomes, and is the reason why a proper framework is important in communicating the right message to all stakeholders. It enables sustainable business revenue and long-term growth to be generated while conserving the environment and improving communities. Developments and progress can be met through proper ESG without compromising and jeopardising the natural resource and future generations. Apart from that, it attracts and retains talent in our workforce and also the community’s well-being.
DRIVING SUSTAINABILITY CULTURE FROM THE TOP
A strong ESG proposition requires a strong driver behind the wheel to push agendas and meet targets in providing impact, locally and on a global scale. Here in DRB-HICOM, our sustainability governance is led by the Board of Directions, overseeing strategic direction to embed ESG elements into our daily business.
The strong sustainability governance structure established in the Group increases the trust of our shareholders, business partners, and employees, ensuring proper accountability in not only managing sustainability issues within the Group, but also identifying opportunities that would bring long-term value to the organisation.
The importance of sustainability and its principles are rooted across every operational level here in the Group which helps in creating a culture that embeds sustainability into our day-to-day work and business.
Our stakeholders are an essential part of our business. We always consider their expectations and concerns in shaping our sustainability journey. Before implementing any sustainability strategies and initiatives, appropriate measures are taken in determining priority aspects of each stakeholders, through the process of identifying and engaging our stakeholders and understanding their scope of interests. This enables us to reflect and prioritize ESG matters accordingly and showcased through the materiality matrix, which is carried out on a biennial basis or when there are notable changes to the business prospects and landscape. By doing so, we strived to ensure the material matters remained relevant to our businesses and surrounding, and appropriate measures, policies, and strategies can be adopted.
A STRONG ESG PROPOSITION WHICH BRINGS VALUE TO THE BUSINESS
Integrating a strong ESG proposition enables an organisation to excel. These may include gaining access to new markets and grow existing ones, cost reductions, employee productivity, investment and asset optimization to name a few. An organisation that has a comprehensive ESG proposition places them ahead of other companies, being in a good position to receive businesses, meeting the demands of customers and stakeholders, and also contributing to a positive impact to the environment and the community, and to also meet customers’ demand.
World Resources Institute had stated that more than 70% of global GHG emissions are contributed by energy sectors, which was due to the rapid increase in human activities and energy consumption, causing the climate change challenges we are facing. Being committed to reducing our carbon emissions, our organisation’s strategies focused on decarbonizing our business operations. We recognize that carbon footprint reduction is a long-term journey that requires collective commitment from the government and corporations, especially in meeting Malaysia’s commitment to being a carbon-neutral nation by 2050.
- Decarbonizing Our Business
Transitions of our business operations were made by looking into initiatives in reducing carbon emissions through our Group-wide Rooftop Solar PV project in 2019. To date, the total solar capacity of the Group stood at 29MWp, which reduces our carbon footprint by 31,000 metric tonnes CO2e annually, equivalent to removing 7000 cars on the road.
In our journey of transitioning to a low-carbon footprint corporation, natural gas had become the cleanest burning fossil fuel that can supplement intermittent renewable energy sources, as well as ensure a reliable electricity supply. We have switched to cleaner alternatives by using natural gas as compared to liquified petroleum gas (LPG) since 2020 to help improve energy efficiency at our manufacturing plants. The outcome of this switch resulted in cost savings of more than RM3 million and carbon footprint reduction of approximately 700 metric tonnes CO2e annually.
To further improve our efforts in reducing our GHG emissions, the Group is studying Scope 3 emissions, which are other indirect emissions that occur in a company’s value chain. It is estimated that Scope 3 emissions account for 80-97% of a company’s GHG emissions. By taking steps to understand and identify the heavy carbon emission contributors, measures can be put into both upstream and downstream of a company’s value chain.
- Reducing Our Waste Generation
Under the 12th Malaysia Plan, the national target has set a 40% recycling rate by the year 2025. DRB-HICOM has taken in the responsibility to commit and drive initiatives to meet this target, by collaborating with local communities and relevant stakeholders.
An example of this is through our Procurement Policy, where guidance has been provided for all stakeholders to adhere to applicable environmental laws and regulations across our business operations and environment. Engagements with waste management contractors were done to ensure their responsibility and ethics in dealing with the collection and disposal of waste produced by the Group.
Digitalization has been one of the methods more widely used to manage and reduce waste by the Group. Our paper-based administration application has been eliminated and migrated to the online-based application, which not only improved efficiency and productivity but also help reduce our consumption of paper.
The introduction of DRB-HICOM Green Day since 2021 was intended to bring awareness on the importance of “Green-culture” to our employees and communities, displaying our commitment and enthusiasm responsibility to the cause. Activities that were held included used clothes collection and sale of upcycled items, collection of goods for recycling and sharing sessions on composting to name a few.
- Optimizing Our Water Resources
With increased water demand, reduction of clean water resources and the increased water pollution due to overpopulation and uncontrolled economic growth, approximately six billion people will struggle to have access to clean water by 2050, according to United Nations World Water Development Report. DRB-HICOM believes that water scarcity will not only affect our business operations but more importantly, negatively impact the ecosystems and the community we serve.
The initiatives are taken by the Group to ensure that water scarcity will be addressed through relevant resources and with advancing technologies, improvements are already being made to address the efficiency of our water usage across our operating companies. Our manufacturing plants ensure that the effluent discharged complies with all statutory requirements set by the Department of Environment (DOE), making sure that water released from the process is compliant and safe for the environment and the community, all of which is done through the in-house treatment facilities, enabling the manufacturing facilities to reuse the treated wastewater back into their manufacturing process. Since 2015, we have managed to recycle over 676,850m³ of water, resulting in approximately RM1 million in savings.
- Caring For Our Workforce Well-Being
The people and the community we serve have always been our top priority. Here in our organisation, our Safety, Health, and Environment (SHE) Policy is put into place for matters related to our employee safety and health, which reflects our business environment and SHE practices. DRB-HICOM’s overall safety and health strategies are driven by the Risk Management Committee (RMC), which is headed by our top executive officer, the Group Managing Director, with the committee members comprised of senior management officers, indicating the importance of our employees’ well-being. Ensuring the continuity of positive safety culture is a priority in the organization, we continuously emphasize on Zero Harm, a programme which aspires us to act towards reducing the number of work-related incidents and encourage a good safety culture. - Celebrating Inclusivity and Human Rights
We always believe that our employees are the one who create value within the system, and inclusivity is a priority here, regardless of position, age, gender or ethnicity. Apart from attracting and recruiting talents, our Group Human Capital (GHC) is also in charge of our employees’ learning and development, nurturing a continuous high-performance culture and sustaining an environment that embraces diversity and inclusion.
Our employee’s learning and development progression is a valuable factor in staying relevant and progressing the Group into the future. Thus, when the COVID-19 pandemic occurred, it did not stop us and our employees from continuous learning. Digital learning tools and resources were made available, enabling employees to access them independently and remotely. This has propelled us forward and set us off on our journey toward a continuous learning culture.
The Group has always put emphasis on creating job opportunities that value human rights. Our commitment to human rights is aligned with the Universal Declaration of Human Rights by the United Nations. As part of our recruitment process, our Human Resource Planning & Recruitment Procedure had been revised to incorporate diversity and equal opportunity. Our belief in respecting human rights is shared with our suppliers via the Vendor Code of Conduct (VCOC), prohibiting our suppliers to be linked with any human rights violations such as forced, child and trafficked labour, and poor workers’ living conditions.
The Group has also incorporated the establishment of Human Rights Policy in its work plan, where it highlights the Group’s commitment to diversity and equal opportunity, as well as strong stance against workplace discrimination and harassment.
- Responsible Corporate Citizen to the Community
Just as an organization shapes its surrounding communities, communities have an equal impact to how our Group and our business functions and operates. Through our Corporate Responsibility (CR) plan, we commit to protect, empower and positively impact the various communities around us.
To further strengthen our commitment, a policy was established in 2021 to assist the Group to have a more structured approach in creating social impact, achieved through partnerships with different entities with a common goal, prioritizing education and nation-building activities amongst the community, and cherishing community welfare. The initiatives created are aligned with the ESG principles of our Group, through our volunteer arm called Sahabat DRB-HICOM, which simply means Friends of DRB-HICOM, where community development, nation-building, education, and environmental protection initiatives are created in partnership with charitable bodies and NGOs to allow our employees to give back to the community.
In FY2021, continuation of aid was given to those impacted by the COVID-19 such as contribution of Personal Protective Equipment (PPE) for the medical frontlines, as well as daily necessities and food for the affected groups demonstrating the Group’s care toward the community. We had also assisted to ease the burden of over 300 families which falls under the low-income category by providing them with food baskets, as part of a collaborative effort between Malaysia Foodbank Foundation, or Yayasan Foodbank Malaysia (YFBM).
ESG PROPOSITION – A TENET IN DOING BUSINESS
A strong ESG proposition is not only essential in determining the future of an organisation’s journey, but also in achieving sustainable global development in the long run. The right ESG framework will enable us to go further in achieving the goals that we have set, correct the wrongs and better ourselves along the way to provide for a better future for current and coming generations through positive environmental impact, utmost safety performance and the general wellbeing of the community we impact. From having the right driving force from the top management, strong awareness in our Group, and with the right implementation, a robust ESG proposition helps steer the future of the organisation and the community in the right direction and impacting our surrounding in a larger scale.
