Almost every other day on various platforms, we receive feeds and articles on the importance of putting in place Environmental, Social and Governance (“ESG“) policies that contribute towards ethical and responsible way of carrying on business, with the golden mantra on being ‘sustainable’. Recently reported events also demonstrated an increasing shift in investors’ investment criteria and objectives, that place significant emphasis on ESG policy disclosures and compliance with the law in assessing how well the investment will fair in the market. We see companies faced with compliance issues being adversely affected financially, resulting in the loss of goodwill from the negative media coverage given the growing investor sentiment wary of ESG risks. In the most extreme cases, this has come at the risk of losing access to an entire market. From regulatory actions taken by US authorities on Top Glove shipments over concerns of alleged human rights concerns, to the unprecedented ousting of directors at Exxon Mobil by activist investor group Engine No. 1, and ongoing bilateral discussions taking place relating to EU imports of Malaysian palm oil – these incidents demonstrate that both the investors and businesses may have underestimated the ESG imperative at their peril.
In this Update, we take a closer look at some of the environmental law compliance issues frequently encountered in Malaysia.
For more information, click here to read the full Legal Update.
