Session 5: Environmental, Social and Governance (ESG) - MCCG and the Rise of ESG

Speaker: Michele Kythe Lim, Wan Kai Chee, Shanti Geoffrey, Kang Mei Yee
Time: 4.00 p.m.

Example: FTSE 4Good Bursa Malaysia top 100 index ~> most compliant with ESG

Listing requirements: disclosure requirements / obligations of listed companies.

If sustainability issues material to prospects of company, have to disclose.

Ho Kang Peng v Scintronix [1996] 1 SLR 541

MCCG 2021 highlights on appointment of directors are best not to be selected from anyone affiliated
with politicians. How do you think companies in Malaysia are ready for this?
Michele Kythe Lim 04:42 PM
Hi Tengku Nadiatul. If I may assist on this. I think with the MCCG 2021 and hopefully Bursa adopting
this too, companies in Malaysia will be ready for this. More importantly we can see the benefits of
adopting this or on the converse the downsides on not adopting this recommendation.

Khong Siong Sie BC/K/1197 04:42 PM

What is the general sentiment of Malaysian investors in relation to a company's commitment towards
ESG (value creation) vs the traditional profits sharing via dividend/shares? Are we seeing a shift
towards ESG? Please do share your observations. Currently, it would appear that (ESG) value
creation is still at its infancy in Malaysia. Thank you.
Michele Kythe Lim 04:46 PM
Hi Siong Sie. I would say that investors do see the value proposition of adopting ESG. We just need
to see more local activism on it. I work with many institutional investors and although the Black Rock
and foreign ones are much more ahead in this sphere, our local institutional investors are very aware
of the value creation and are slowly implementing their stewardship policies on their investee
companies.

the recent revision of MCCG, recommending that board chairman should not be a member of AC, NC
or RC, is this mandotary or just best practice?

Michele Kythe Lim 04:24 PM

Hi Beow Chieh, the MCCG provisions are not prescriptive hence not mandatory but all companies are
encouraged to adopt it particularly large companies. If PLCs depart from the recommendation they
would need to explain and state how they will comply in 3 years. So really best practice and you need
to explain if you do not adopt it within the 3 years.

(1) What is your advice to companies embarking on a proposed listing on the Main and ACE market.
To what extent should these companies comply with the latest MCCG Code at the point of
submission of its application to the SC and or Bursa Malaysia? (2) What is mandatory and what
should be good practice for a potential public listed corporation?

Standards for palm oil … etc

Institutional investors, stewardship guidelines, Blackrock.