IN the second part of the interview with FocusM, Lenovo Malaysia country general manager Varinderjit Singh talks about the challenges companies face in adopting environmental, social, and governance (ESG) matters and how to overcome the challenges that lies ahead.
FocusM: What are some of the barriers stopping Malaysian companies from adopting an ESG strategy and what can the authorities do to remedy the situation?
Varinderjit Singh (VS): Good question! The main barriers to ESG integration among Malaysian companies are, in my view, as follows:
- A limited understanding of ESG issues – Unfortunately, many investors are not “ESG-aware”, hence do not push for ESG elements to be practiced in business operations. Additionally, SMEs tend to equate ESG with corporate social responsibility (CSR), indicating a lack of understanding on ESG policy and hence, the lack of a structured approach in developing an ESG strategy;
- Costly for SMEs – Sustainability education may be costly, and SMEs face a shortage of skills related to this area. As it is, SMEs are struggling to negotiate their way around digitalisation and new technologies that is complicated and a resource-consuming process; and
- Lack of comparable ESG data – Investors justifiably remain concerned with the quality, accuracy and comparability of the ESG data that they are using in their analyses due to the lack of standardisation and verification regarding ESG disclosures and ESG data. Inconsistency in ESG scores leads investors to feel frustrated by conflicting definitions of what is considered “good” in the ESG space and how to adjust their analyses accordingly.
However, it is not all doom and gloom as there are several initiatives to remedy the situation, including the Government’s role in providing grants for SMEs to subsidise ESG assessment and certification costs as well as devoting training and resources for ESG analysis.
Furthermore, companies and investors can agree upon a single ESG reporting standard that could streamline the data collection process and produce quality data.
With that said, how can Malaysian companies tap into technological innovations to accelerate their ESG journey?
VS: Malaysian companies can work closely with vendors such as Lenovo in their ESG integration journey. We have the technology and the expertise within the field in transforming their business.
For example, businesses can use our Lenovo’s Asset Recovery Services (ARS) programme, aimed at making it easy for companies to recycle their IT equipment at the end of life through our support of product take-back.
ARS is a new set of services to help business customers manage their IT equipment at the end of life by providing equipment take-back, data destruction, refurbishment, and recycling services.
What are Lenovo’s efforts in boosting the integration of ESG?
VS: We remain diligent in our efforts to mitigate the impact of climate change through new energy emission reduction goals that will help to continue minimising our carbon footprint.
Within the next five years, our goal is to source 90% of electricity used in global operations from renewable sources and remove one million tons of greenhouse gas (GHG) emissions from our supply chain.
Lenovo is also exploring our own path to net-zero targets after being selected by the Science Based Targets initiative (SBTi) to road test science-based methodology for achieving net-zero emissions.
While we track the carbon emissions of our global business, we are also helping users everywhere to decrease their carbon footprint by improving the energy efficiency of our products.
By 2030, we target to achieve 50% improvement in energy efficiency of Lenovo desktops and servers and 30% improvement in energy efficiency of Lenovo notebooks and Motorola products.
Separately, we are aware of the importance to continue integrating diversity and inclusion throughout our company.
From increasing underrepresented minorities within our executive ranks to our growing Lenovo Product Diversity Office, we are using our global nature as our greatest strength to guide us forward.
Overall, why do you think Malaysian companies should take ESG initiatives seriously, given that many are still stuck in the old ways of doing things?
VS: ESG initiatives should be a top concern of corporate management and boards as a robust ESG programme can open opportunities to large pools of capital, build a stronger corporate brand and promote sustainable long-term growth benefiting companies and investors.
With that said, companies that are committed to executing their ESG policies need to identify the key focus areas and find out on how they can improve in those areas and engage the right partner to assist in steering the company towards the right direction.
As we continue to navigate an ever-changing world and events that challenge us as individuals and communities, we know our greatest potential comes when unified under a common purpose.
At Lenovo, we will continue to ensure that our smarter technology delivers greater equity, sustainability, and access – for all. – Dec 26, 2021.
Pic credit: Alva
