The transformational journey embarked upon by Tenaga Nasional Bhd (TNB) towards sustainability transcends commitment; it has become a pivotal responsibility. The company’s pledge to navigate Malaysia towards net-zero aspirations rests on a solid foundation. With the National Energy Transition Roadmap (NETR) guiding its path, TNB is placing paramount emphasis on transparency in its environmental, social and governance (ESG) reporting — a move set to redefine the industry’s approach to sustainability.
Amid its strides to address carbon emissions, TNB is elevating its sustainability endeavours by leveraging the power of data analytics, as highlighted by its chief sustainability officer Leo Pui Yong.
“We are committed to integrating sustainability into our business strategy and operations. By entrenching this culture of sustainability as a core value that drives our journey towards net zero, we can engage all our business entities, including our subsidiaries, to be active participants in this journey,” says Leo.
The grand ambition of achieving net-zero status by 2050 and the Energy Transition Plan stands in alignment with the NETR. TNB has undertaken multifaceted roles, emerging as a catalyst for transformative projects. These include championing initiatives like large-scale solar parks, innovative hybrid hydro-floating solar set-ups, and the integration of hydrogen and ammonia at power plants — all emblematic of TNB’s readiness to support NETR initiatives and steer Malaysia’s energy transition.
“Our Energy Transition Plan is a comprehensive road map that traverses the entire electricity value chain, delineating a clear trajectory towards embracing low-carbon sources. To embed sustainability into every facet of our operations, we are expediting the deployment and execution of ESG initiatives through collaborative efforts with our key stakeholders,” emphasises Leo.
TNB’s evolution towards sustainability showcases a commitment to environmental stewardship and underscores a paradigm shift towards a future, where sustainable practices become the norm, setting a benchmark for the industry at large.
Navigating challenges one step at a time
TNB confronts a series of hurdles in its journey towards energy transition and ESG integration, with internalising ESG practices standing as a prominent challenge. Leo emphasises the pivotal role of setting the sustainability tone from the organisation’s upper echelons.
In response, TNB has taken proactive steps by establishing a Board Sustainability and Risk Committee and expanding the Sustainability and Energy Transition Council’s (SETC) scope to encompass all facets of ESG. The appointment of Leo as the chief sustainability officer in June this year further underscores TNB’s commitment to integrating sustainability into the Group Executive Management Committee and SETC to propel deployment efforts.
To bolster disclosure requirements and transparency, TNB introduced a dedicated Sustainability Division. This division focuses on consolidating over 150 ESG data indicators from various sustainability reporting frameworks. It aims to effectively execute and coordinate ESG initiatives across the TNB Group while supporting sustainability reporting, assurance and compliance.
“The TNB Sustainability Division stands as a cornerstone for strengthening sustainability governance and propelling our net-zero aspirations. We prioritise actionable strategies to fulfil our sustainability commitments without impeding business growth. Integral to this journey is the digitalisation of ESG data and indicators, a key stride for transparent disclosure and well-informed decision-making,” asserts Leo.
TNB’s ESG indicator digitalisation efforts are prioritised in accordance to sustainability reporting frameworks that play a pivotal role in fostering corporate accountability and transparency within today’s business landscape.
Noteworthy frameworks, such as the Bursa Sustainability Reporting Guide 3rd Edition and the Global Reporting Initiative (GRI) Standards, provide organisations with a standardised and consistent structure to disclose their environmental, social and governance (ESG) performance.
The adoption of these frameworks promotes transparency, allowing stakeholders to compare and analyse information across companies.
Investors increasingly rely on established frameworks like MSCI ESG Ratings, SASB and sector-specific GRI Standards to make informed decisions aligned with their values and risk tolerance.
Currently, TNB’s sustainability reporting consistently aligns with both local and global sustainability standards and frameworks. TNB, aligning with these sustainability reporting frameworks, ensures stakeholders gain a comprehensive understanding of its ESG performance, facilitating global comparability.
Transparency is key moving forward
In March this year, the Global ESG Monitor (GEM) released its 2022 analysis report, assessing non-financial reporting transparency among the world’s largest companies. For the first time, Malaysia joined the benchmarking report, evaluating the 30 companies listed on the FTSE Bursa Malaysia KLCI (FBMKLCI). Notably, TNB clinched the top spot in Malaysia’s ESG transparency, ranking 42 globally for its robust reporting on non-financial ESG data encompassing strategy, materiality and indicator disclosure.
This global recognition validated TNB’s strides in fortifying its sustainability governance structure. By August, the company charted its course to emerge as a global ESG leader, leveraging data digitalisation for efficient disclosure, monitoring progress and enabling informed decision making. This roadmap emphasised robust execution of ESG initiatives and comprehensive stakeholder engagement.
In November, TNB revised its Environmental Policy, addressing identified gaps by enhancing policy content. Previously centred on environmental regulations and limits, the revised policy now champions four core principles. It commits to emissions reduction guided by TNB’s Energy Transition Plan; embraces climate change measures; optimises natural resource utilisation via water and biodiversity management; and champions a proactive circular economy to safeguard ecosystems, minimising waste and pollution.
These initial strides toward ESG leadership aim to tackle common organisational challenges, including internalising ESG practices, heightened disclosure requirements and effective communication strategies.
“Transparency in ESG reporting is the way forward. GEM’s recent global recognition spurs our unwavering commitment to fortify sustainability governance. As we enter 2024, we will continue to focus on elevating transparency in our sustainability practices, cementing our dedication to sustainable growth.”
Source – The Edge