KUALA LUMPUR: The introduction of formal emissions-related national laws in Malaysia would elevate compliance with environmental, social and governance (ESG) requirements, according to the Malaysian Bar.
Its president, Mohamad Ezri Abdul Wahab, stated that as Malaysia continues to advance its ESG agenda, the synergy between legal expertise and sustainable practices is creating a beacon of hope and serving as a testament to what is possible when a nation commits to the right to life and the right to a clean, sustainable environment.
"Such legislation would provide a clear, enforceable framework for reducing emissions, improving sustainability practices and enhancing corporate governance in a manner that is compatible with the legislative framework of a developing jurisdiction like Malaysia," he said in a statement today.
He noted that countries with stringent climate laws often see improved ESG ratings, as these laws drive systemic changes that contribute to sustainable development goals.
"Legal mandates can drive significant improvements in corporate and industry practices by setting minimum standards for emissions, requiring regular reporting, mandating transparency and accountability, and enforcing compliance," he said.
He said this is particularly relevant for the palm oil industry, which faces intense scrutiny and ESG demands from international markets and regulatory bodies, despite being the world's most efficient oil crop in terms of land use.
By aligning more closely with global standards and demonstrating a proactive approach to sustainability, Malaysia could enhance its attractiveness to foreign investors who prioritise ESG compliance in their investment decisions.
He said this would not only help meet current ESG standards but also position Malaysian industries as leaders in sustainability, potentially exceeding basic compliance requirements.
"The Malaysian Bar is playing a pivotal role in this green narrative. Dedicated to enhancing the legal expertise of its Members in ESG practices, the Bar is equipping a new generation of lawyers through strategic capacity-building and education.
"These lawyers are not just participants but leaders in the global dialogue on sustainability, ready to advocate and implement practices that ensure a balance between economic growth and environmental protection," he said.
On April 28, 2024, the Minister of Investment, Trade and Industry, Tengku Datuk Seri Zafrul Tengku Abdul Aziz, emphasised the unique challenges and nuances for developing countries to implement ESG compliance requirements.
According to the Malaysian Bar statement, the Malaysian palm oil industry continually adapts under international pressure to be environmentally sustainable, hence the industry continues to proactively push all efforts to adopt and refine ESG practices.
It added Malaysia has made significant advancements in ESG compliance and this has been documented, with large plantation companies maintaining high sustainability ratings and making substantial progress towards reducing greenhouse gas emissions.
"This is indicative of our broader industry's resolve to align with global sustainability benchmarks and address the challenges posed by regulatory and trade barriers, such as those from the European Union," it said. — BERNAMA