|Launch Of Bursa Malaysia's CSR framework For PLCS|
LAUNCH OF BURSA MALAYSIA'S CSR FRAMEWORK FOR PLCS
Y Berusaha En. Ho Kay Tat,
Ladies and gentlemen.
In less than an hour, more than 500 citizens of corporate Malaysia will be taking to the streets in a race that is perhaps the biggest and most public annual display of corporate social responsibility at work in our society. The Edge-Bursa Malaysia Rat Race is a phenomenon that I have observed for some years now. I am happy to note that its popularity continues to grow and am indeed glad to be a part of the Rat Race 2006.
2. Aside from the honour of flagging off the race between some of Malaysia's most notable CEOs, I am also here as part of the agenda to urge corporate Malaysia to do more Corporate Social Responsibility (CSR) and embrace it as an essential part of business strategy. Indeed, I would contend that good CSR is key, towards ensuring the sustainability of business and Malaysian companies in the years ahead.
3. As a nation, we have been forward looking and laid out our vision for where we want to be by the time the next generation assumes the mantle of leadership. Vision 2020, the National Mission, Malaysia Plans â€œ these are all embodiments of our aspirations and the legacies we hope to leave our children as foundations for them to build on.
4. The national economic development agenda is premised on growth with equity. Our vision for developed nation status is not one measured purely in terms of total economic income and wealth. The fruits of development must benefit all the rakyat. To pursue economic growth alone without distributional goals would not be sustainable. Equity is key towards ensuring the stability of the nation and social fabric, thus providing a sustainable platform for future economic growth.
5. If we are to be a successful developed nation, corporate Malaysia must also be based on a sustainable framework. Malaysian corporates cannot afford to just pursue short term profits in disregard of the community and environment in which they operate in. In the same way that underinvestment in capital would limit the capacity and economic life of a factory, underinvestment in the community and environment will undermine the sustainability of a corporation's future profits and viability.
6. This is the reason CSR is important. CSR goes beyond doing good deeds or giving money to charities. It is about companies making money in a responsible manner. CSR thus involves integrating socially responsible policies, practices and programmes into decisionmaking and business operations. In short, CSR is about institutionalising a way of doing business which provides the corporation and its future management with a sustainable base for future earnings and operations.
CSR builds financial value
8. The fact is CSR builds tangible business value for companies that have embraced its concepts fully. Apart from the intangible benefits of building brand equity and goodwill among stakeholders, CSR has proven to be a powerful tool that has driven the success of many companies worldwide. It has been the catalyst for identifying and developing new market opportunities, reducing cost, improving competitiveness and increasing profitability of companies. Conversely, poor CSR such as having vendors using child labour, have been detrimental for major corporations.
9. Some of the world's most popular consumer brands today are, in fact, built from the ground up around CSR concepts. The Body Shop adopted a business model that nurtured the growth of raw material producers in under-developed nations, and encourage recycling. It is not uncommon for principal employers for a particular local community, to invest in terms of community facilities and social support given the pay off in the long run in terms of promoting loyal and productive employees. It would not be an exaggeration that all major global corporations have adopted CSR as an integral part of corporate strategy. We also see for instance leading petroleum corporations taking the lead in developing renewable sources of energy, in addition to devoting significant part of its advertising towards publicising its CSR activities.
The acid test: global investment trends
Ladies and gentlemen,
11. For most in the business community, the acid test of any concept is still the bottom line. If a solution works, it will show in the figures. With CSR, this has certainly been the case.
12. Studies have shown that there is a positive correlation between companies that have sound CSR practices and their share price performance. Many international socially responsible indices have also emerged like the Dow Jones Social Index, FTSE4Good and the Jantzi Social Index all of which are profiling the worldÃ¢â‚¬â„¢s best CSR companies to attract socially responsible investment funds, which now amount to a figure in excess of US$ 3 trillion. In countries like the United Kingdom, it is mandatory for pension funds to apportion some of their funds in CSR companies.
13. The boundaries between conventional investing and socially responsible investing are fading. It is only a matter of time before socially responsible investing will become a standard element of general securities analysis.
14. The importance of CSR is certainly making its presence known in the share prices of companies around the world, especially in the more developed markets. This is a trend we expect to be mirrored in Malaysia. YAB Prime Minister / Minister of Finance had articulated in the Budget 2007 speech last Friday that Government linked investment funds, such as EPF and KWAP, will in their investment decisions, consider favourably PLCs with good CSR practices.
15. Many internationally recognized elements of good CSR can be applied globally, such as protection of the environment, contributions to local communities, ethical procurement and non-discriminatory policies. Nevertheless, CSR by definition must be viewed in the context of the community and environment in which the corporation operates. Thus, the priorities for CSR in Malaysia context, should take into consideration the nation's social aspirations and socio-economic objectives. In this regard, YAB Prime Minister in the Budget 2007 speech had identified examples of good CSR such as, developing local and Bumiputera vendors, ensuring ethnic diversity of employment, developing human capital through Adopt a School programmes, as well as supporting charitable institutions, like drug rehabilitation centers.
16. YAB Prime Minister also called upon PLCs to encourage employee volunteerism. The Government believes this is important because the success of CSR programmes relies not only on financial resources but also effective implementation. I dare say, the PLCs have amongst Malaysia's most talented and have employees with unique skill sets. For example, to train unemployed graduates with the requirements of the power or telecommunications industries, who better but the major industry players, namely TNB, Malakoff, YTL, TM, Maxis and Digi.
Putting CSR in motion in PLCs
17. Towards implementing YAB Prime Minister's Budget 2007 announcement requiring all PLCs to disclose CSR activities, I am very pleased to announce the debut of Bursa Malaysia's CSR framework for PLCs.
18. As an exchange and a listed company, Bursa Malaysia is in a unique position to face the challenge that CSR poses both from a commercial and national standpoint. Being a listed company, Bursa Malaysia has to walk the CSR talk and shape itself into a role model for other PLCs to follow. Through its regulatory role, Bursa Malaysia has the ability to influence the way all the other 1000-odd PLCs view, adopt and integrate CSR into their own business practices.
19. There are three critical elements to the Bursa Malaysia CSR framework to which I would like to draw your attention.
20. First, the framework has incorporated criteria drawn from our national aspirations and policies. Thus providing PLCs with guidelines for building CSR initiatives that are in line with our national goals. For example, its community segment identifies education as a possible area for PLC focus, complementing the Government's call for the private sector adoption of schools. Under the marketplace segment, ethical procurement and vendor development initiatives also qualify as sanctioned CSR focus areas.
21. Secondly, the disclosure framework is very flexible. At a minimum, PLCs are required to include a CSR statement in their annual reports. However, the suggested elements and content of the CSR statement is strictly voluntary. At best, the framework gives PLCs clear guidelines and actionable ideas for implementing their own CSR initiatives. The intention is to raise the awareness of CSR and encourage PLCs to integrate the practice of CSR as part of the way they work and think. The quality of the PLCs will, thus, surely improve.
22. Lastly, the framework Bursa Malaysia is introducing is a set of guidelines, and not a step-by-step prescription. This is critical if companies are going to develop meaningful CSR agendas, policies and initiatives. Just as in business, no one CSR template will fit all PLCs. Every company has a mandate to conduct its own self-examination and identify its individual areas of relevance within the CSR framework Bursa Malaysia has drawn up. Find your own passion that will help drive your business and build your own niche.
Ladies and gentlemen,
23. With the new framework, we have effectively thrown our hat into the ring and volunteered Malaysia as a willing participant in the race to reach and remain in the developed market category of nations. Malaysia's commercial objectives will be driven by socially responsible conduct and policies that are in the national interest and are globally recognized. We cannot achieve this without your participation and conviction in the value of CSR.
|Terakhir Dikemaskini Isnin, 13 Februari 2012 09:48|