KUALA LUMPUR, April 8 — Petroliam Nasional Bhd (Petronas), Tenaga Nasional Bhd and other public listed companies (PLCs) have express interest to produce credits for the planned Voluntary Carbon Market (VCM).

Bursa Malaysia Bhd chief executive officer Datuk Muhamad Umar Swift said in addition to developing the carbon exchange, it is also seeking parties to produce the carbon credits.

He said VCM will help Malaysian companies to remain competitive in the country’s exporting markets.

In addition, it will provide a mechanism for Malaysian companies to offset their carbon obligations in export countries, Muhamad Umar said this during a session on Corporate Sustainability & Environment, Social and Governance (ESG) Investing, organised by the School of Economics, Finance and Banking (SEFB), Universiti Utara Malaysia.

Malaysia’s third-largest trading partner, the European Union (EU), is seeking to impose a levy on imported carbon-intensive products.

Consequently, Malaysian exporters may have to pay a tax in order to sell their products in the EU market, which is where the VCM could help to neutralise the impact, he said.

By achieving carbon neutrality of their products, exporters can ship their products to the EU seamlessly, he added.

‘’We wanted to look at how we can address the threat and opportunity,’’ Muhamad Umar said.

On ESG, he said Bursa Malaysia has issued a public consultation document to seek feedback on the mandatory disclosure of various ESG metrics.

"This will make it easier for investors to understand what companies are doing to meet their ESG requirements,” he said.

Muhamad Umar said the Covid-19 pandemic has put ESG on the roadmap of many companies.

At present, there are 79 PLCs in the FTSE4Good Bursa Malaysia Shariah (F4GBMS) Index, which was launched in July 2021 to cater to investor demand for ESG and shariah-compliant index solutions. 

He said adopting ESG is crucial for PLCs mainly to secure capital as more investors and fund managers are now adopting the sustainable elements.

The Employees Provident Fund has launched a Sustainable Investment Policy in achieving its commitment of ESG compliance by 2030 and a climate-neutral portfolio by 2050.

Permodalan Nasional Bhd will also launch its ESG pledge soon.

Bursa Malaysia has also introduced PLC Transformation Programme that will run through to 2025, aims at steering all PLCs towards accelerating their growth strategies and improve performance. 

The programme will help PLCs achieve higher levels of profitability in view of the changing investment climate with ESG.

Muhamad Umar said two-thirds of listed companies on Bursa Malaysia experienced losses during Covid-19. He said, in fact, public listed companies’ downtrend in profitability was seen for some period of time. — Bernama