Taking Stock and Charting the Future of CSR in Malaysia

CSR Wednesday, CSR Asia‘s bi-monthly briefing event, was held recently at Bursa Malaysia. Speakers at the event were Bursa Malaysia‘s CEO, Dato’ Yusli bin Mohamed Yusoff and CSR Asia’s Chairperson, Richard Welford, who together discussed the current situation of corporate social responsibility (CSR) in Malaysia and our future trends.

Dato’ Yusli believed that sustainability is a journey, asking how it could become part of Malaysia’s business philosophy. He said that Bursa Malaysia would like public listed companies (PLCs) to embrace sustainability, and the organisation would champion this by raising the profile of companies which were exemplary in the field.

He felt that sustainability “is big business” and that things are not going to change. In fact, he said, that it was going to get bigger. Furthermore, Dato’ Yusli said that sustainability was a concern to international investors, especially post Copenhagen. He noted that USD20 trillion are in SRI funds. Dato’ Yusli noted:

Some fund managers see good sustainability performance as good corporate governance.

Businesses are not sustainable if corporate governance is lax, according to the Bursa CEO. Furthermore, he suggested that companies need to move from reactive response to being aspirational, and not being defensive but adding value through their environmental and social programme, Dato’ Yusli explained.

At the end of the day, Dato’ Yusli said he’d like CSR to be part of boardroom discussion. He said management should be more accountable, not only to shareholders, but to all stakeholders. Companies must take into account the interest of society at large, he added.

Meanwhile, Mr. Welford of CSR Asia pinpointed three areas of concern in CSR, namely:

• climate change
• community investment
• supply chain challenges

Mr. Welford said that Malaysia’s supply chain was getting more risky, due to labour shortages, a new wave of migrant workers coming in, child labour in certain parts of the developing world. He said that the risks to reputation, brand, trust and also legal risks need to be taken into account, especially as inspection and auditing are both risks in themselves, given that employers and auditors “tell lies”.

In its media advisory, CSR Asia noted:

During this time, we have seen a giant leap in awareness and understanding of CSR among Malaysian corporations. The improvements have been helped along by regulators’ action such as Bursa Malaysia’s CSR Framework and Khazanah National Berhad’s Silver Book as well as increased media exposure and a change in business mindset. In the 2010 Budget, the Prime Minister provided a further boost to the CR agenda by announcing a RM1.5 billion fund to provide soft loans to companies that supply and use green technology.

The briefing was part of CSR Asia’s second anniversary in Malaysia.