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Malaysian businesses should embrace sustainability practices as strategic growth drivers

KUALA LUMPUR: The National Tech Association of Malaysia (PIKOM) has called on local businesses to be proactive in making sustainability a core part of their business strategies.

PIKOM (CIO chapter) chairman Malik Murad Ali (left in pic) said that, done correctly, sustainability practices would ensure that early movers stand to develop core competencies that competitors will be hard-pressed to match.

“That competitive advantage will stand them in good stead, and such practices would even serve as strategic growth drivers,” Malik said.

“Businesses that adopt a sustainability mindset and embed environmental, social and governance (ESG) practices into corporate strategy and operations are better prepared and create value for all stakeholders, including themselves,” he added.

Malik, who is also Mydin Mohamed Holdings Bhd (Mydin)’s IT director, said that technology is key for successful sustainability practices, particularly within Mydin’s supply chain to ensure that only sustainable and responsible-produced goods are sourced.

“Technology has also proven to be the critical enabler for Mydin’s culture of innovation,” he said.

“To us technology is not a cost but an investment for greater efficiencies and growth.”

He shared on how Mydin had pivoted to its e-commerce model and opened up a whole new revenue stream during the pandemic.

His e-commerce example, Mydin Express, has proven to be convenient e-commerce avenue for consumers.

“They just need to select the store closest to them, shop online, place their order, receive confirmation via WhatsApp and the products would then be delivered to their house, or they could choose to self-pickup from store,” he said.

He added the company appreciates the strategic relationship with solutions provider SAP, which has enabled Mydin’s compliance with ESG industry standards, effective inventory controls, warehouse management and recall features, all of which have contributed to Mydin’s strong growth throughout the years.

Meanwhile, SAP head of cloud (Southeast Asia) Cynthia Quah (right in pic) said that businesses cannot afford to wait for government and regulatory action to embark on their sustainability journeys.

“The sooner businesses start embracing sustainability practices, the stronger standing and competitive advantage they will get in the market, and in the eyes of key stakeholders like the investors, customers and business partners,” said Cynthia.

“Businesses can start small to identify areas where sustainability can be embedded and work on the overall roadmap,” she added. “They then would start seeing the rewards of being more eco-friendly, winning the hearts of our stakeholders, and improving revenues and bottom lines.”

SAP’s focus on sustainability is part of the company’s 50-year mission of helping the world run better and improving people’s lives by focusing on business processes.

According to a recent study by Oxford Economics and SAP, more work remains to be done to drive value from sustainability for businesses across Malaysia.

While 60 per cent of businesses do not think that it is difficult to be sustainable and profitable at the same time, just four per cent say they receive significant value from their sustainability strategies today, said the study.

“This may be because there remains a disconnect between sustainability plans and actions for many organisations. While six in ten (63%) of Malaysian businesses has a clearly communicated sustainability plan, only 23 per cent have incentivised leaders based on its success and only a third (33%) say their employees are active participants in their sustainability efforts,” said Cynthia.

“Public, private and plural partnerships are quintessential to effect the required change for a green economy.

“Sustainability can be a key growth driver for recurring revenue streams, find new efficiencies, and build new business models based on low-emission, circular, and ultimately regenerative concepts to benefit both the organisation and for our society at large,” Cynthia concluded.

You can read the full study here.