ISSN: 2222-6990
Open access
Pursuant to increasing global emphasis on Environmental, Social, and Governance (ESG) practices, the Malaysian utilities sector comprising electricity, water, telecommunication, oil and gas service providers adopt various national and international ESG reporting standards. Nevertheless, previous studies have highlighted the complexity arising from diverse assessment criteria imposed by ESG reporting standards. Non-uniformity across the assessment criteria poses challenges for compliance and increases administrative burdens and costs. Consequently, this paper aims to provide recommendations to streamline the assessment criteria for ESG reporting within the Malaysian utilities sector. To achieve this aim, this paper attempts to answer a two-tier research question: what common themes can be identified from diverse assessment criteria imposed by the reporting standards within the Malaysian utilities sector? and how should the diverse assessment criteria be streamlined to reduce compliance costs, time, and administrative burden? This paper adopts a thematic analysis methodology covering the assessment criteria of 13 ESG reporting standards adopted by leading utilities companies in Malaysia. The results obtained from thematic analysis identify 20 common themes across three ESG pillars (environmental, social and governance). The novelty of this paper lies in its comprehensive examination of sector-specific ESG reporting, shedding light on the nuances of assessment criteria implementation. By proposing a streamlined approach to assessment criteria, this study anticipates reducing a compliance time, costs, and administrative burdens for utilities companies in Malaysia. Such an initiative holds promise for facilitating more cost-effective ESG reporting practices within the sector.
Azuar, A. (2022, 5/12/2022). TNB addressing ESG challenges as Malaysia`s utility company. The Malaysian Reserve, p. 6. Retrieved from https://www.tnb.com.my/assets/newsclip/05122022b.pdf.
Bonetti, L., Lai, A., & Stacchezzini, R. (2023). Stakeholder engagement in the public utility sector: Evidence from Italian ESG reports. Utilities Policy, 84, 101649.
Clarke, V., & Braun, V. (2013). Teaching thematic analysis: Overcoming challenges and developing strategies for effective learning. The Psychologist, 26, 120-123.
Chodnicka-Jaworska, P. (2021). ESG as a Measure of Credit Ratings. Risks, 9(12), 226-252.
Cort, T., & Esty, D. (2020). ESG Standards: Looming Challenges and Pathways Forward. Organization and Environment, 33(4), 491-510.
Cuthrell, S. (2023). Utility Companies Brace for GHG Emissions Disclosure Regulations. Retrieved from https://eepower.com/news/utility-companies-brace-for-ghg-emissions-disclosure-regulations/#
Eng, L. L., & Fikru, M. G. (2022). Are US electric utilities improving their sustainability disclosures and performance? The Electricity Journal, 35(10), 107221.
Escrig-Olmedo, E., Fernández-Izquierdo, M. Á., Ferrero-Ferrero, I., Rivera-Lirio, J. M., & Muñoz-Torres, M. J. (2019). Rating the Raters: Evaluating how ESG Rating Agencies Integrate Sustainability Principles. Sustainability 2019, 11, 915-931.
Gossain, R. (2023). Legal Underpinnings Drive ESG Amidst Global Flux. 27-46, 27(1), 27-46.
Imperiale, F., Pizzi, S., & Lippolis, S. (2023). Sustainability reporting and ESG performance in the utilities sector. Utilities Policy, 80, 101468.
Islam, M. K., Taufik, N. N. A. A., Zulkifli, N. H., Jaaffar, A. H., & Radzi, H. M. (2021). Developing and Synthesising the EESG Factors of Electricity Producing Company in Malaysia for Its Sustainable Future: A Stakeholder Perspective. Global Business and Management Research, 13(4), 618-637.
Leopizzi, R., Palmi, P., & Cagno, P. D. (2023). Sustainability reporting and electric utilities: A bibliometric analysis. Utilities Policy, 84, 101651.
Liu, X., Yang, Y., Jiang, Y., Fu, Y., Zhong, R. Y., Li, M., & Huang, G. Q. (2023). Data-driven ESG assessment for blockchain services: A comparative study in textiles and apparel industry. Resources, Conservation and Recycling, 190, 106837.
Lozano, R., & Reid, A. (2018). Socially responsible or reprehensible? Investors, electricity utility companies, and transformative change in Europe. Energy Research & Social Science, 37, 37-43.
Moh, J. (2023). Listed companies lack details in ESG reporting, undermine ESG credibility. The Malaysian Reserve. Retrieved from https://themalaysianreserve.com/2023/05/22/listed-companies-lack-details-in-esg-reporting-undermine-esg-credibility.
Mohammad, W. M. W., & Wasiuzzaman, S. (2021). Environmental, Social and Governance (ESG) disclosure, competitive advantage and performance of firms in Malaysia. Cleaner Environmental Systems, 2, 100015.
Naeem, N., & Cankaya, S. (2022). The impact of ESG performance over financial performance: A study on global energy and power generation companies. International Journal of Commerce and Finance, 8(1), 1-25.
Nicolo, G., Zampone, G., Sannino, G., & Tiron-Tudor, A. (2023). Worldwide evidence of corporate governance influence on ESG disclosure in the utilities sector. Utilities Policy 82, 101549.
Ramírez-Orellana, A., Martínez-Victoria, M., García-Amate, A., & Ramírez, A. A. R. (2023). Is the corporate financial strategy in the oil and gas sector affected by ESG dimensions? Resources Policy, 81, 103303.
Khalid, K. H., Wiley, J. (2021). The ESG Value Opportunity: A Decision Point for Utilities. Climate and Energy, 38(5), 10-17.
Senadheera, S. S., Withana, P. A., Dissanayake, P. D., Sarkar, B., Chopra, S. S., Rhee, J. H., & Ok, Y. S. (2021). Scoring environment pillar in environmental, social, and governance (ESG) assessment. Sustainable Environment 7(1), 1-7.
Severoni, E. (2023). Beyond the Energy Transition: Utility Sector and ESG. Retrieved from https://www.doxee.com/blog/marketing/beyond-energy-transition-utility-sector-esg.
Sippel, H., Aqran, R. N., & Vijandran, V. (2023). An overview of ESG in Malaysia – what you must know when you do business in Malaysia. Retrieved from https://www.skrine.com/insights/alerts/august-2023/an-overview-of-esg-in-malaysia-%E2%80%93-what-you-must-know.
Tancke, L. M., Užík, M., Block, S., Glova, J., & Boha, H. (2023). Managerial Perspective on ESG and Financial Performance of Car Manufacturers. Polish Journal of Management Studies, 28(1), 330-343.
Whigham, D., & Herman, C. (2021). ESG utilities survey: Utilities go all in on ESG, but getting it right isn’t a given. Retrieved from https://www.pwc.com/us/en/industries/energy-utilities-resources/library/esg-utilities-survey.html.
Yébenes, M. O. (2024). Climate change, ESG criteria and recent regulation: challenges and opportunities. Eurasian Economic Review 14, 87-120.
Yen-Yen, Y. (2019). The Value Relevance of ESG Disclosure Performance in Influencing the Role of Structured Warrants in Firm Value Creation. Polish Journal of Management Studies(1), 468-477.
Zenkina, I. V. (2023). Prerequisites and prospects for improving the quality of ESG assessment as a tool for responsible investment. Paper presented at the XII International Scientific and Practical Forum “Environmentally Sustainable Cities and Settlements: Problems and Solutions” (ESCP-2023).
Zumente, I., & Bistrova, J. (2021). ESG Importance for Long-Term Shareholder Value Creation: Literature vs. Practice. J. Open Innov. Technol. Mark. Complex., 7(127), 1-13.
Hashim, H. N. M., Bakar, N. A., Husin, S. M., Darbis, N. D. A., & Mahmood, A. (2024). Thematic Analysis of Assessment Criteria for ESG Reporting within Malaysian Utilities Sector. International Journal of Academic Research in Business and Social Sciences, 14(11), 1030–1045.
Copyright: © 2024 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode