Digital Solutions Key To Combating Climate Change
By Shuba Karun, Head of ESG Sustainability & Social Investment, Digital Investments, Malaysia Digital Economy Corporation (MDEC)
Published on 12.09.22< Back
I believe that there is increasing evidence that climate change could pose a significant risk to Malaysia. We are not immune from what is happening in the rest of the world. A report by Swiss Re has indicated that Malaysia could experience economic growth 20% below expectations by 2050, even if the global temperature increase is limited to 2°C.
Certainly, efforts to combat the effects of climate change are not new to Malaysia. Our government has made a strong commitment to boosting our nation’s resilience against the impact of climate change through a series of ambitious goals. Key amongst these is to be climate neutral by 2050, and to reduce greenhouse gas emissions intensity by 45 percent by 2030, based on 2005 emission levels.
Significant action has already been taken across the board, from clean growth to sustainable urbanisation and green finance. Plans have also been announced for the creation of a Malaysian National Adaptation Plan and the ramping up of Environmental, Social and Governance (or ESG) related strategies.
Digital action equals climate action
Through the new national strategic initiative, Malaysia Digital, MDEC will play a pivotal role in positioning the digital economy at the heart of the nation's shift to more sustainable economic practices. The role of the private sector in championing sustainable practices is crucial to achieving this in two main ways.
Firstly, the World Economic Forum recognises the important role that the digital economy must play in addressing climate change. Digital tech solutions have the potential to reduce GHG emissions by up to 15% by 2030, including through solutions in energy, manufacturing, agriculture, buildings, services, transportation, and traffic management. This corresponds to more than the current carbon footprints of the European Union and the US combined.
Undoubtedly, digitalisation is already transforming the global economy and unleashing powerful forces in every industry. But I believe that it is through the Fourth Industrial Revolution – including technological advances such as 5G, the Internet of Things (IoT) and artificial intelligence (AI) – that the digital sector can take the pace of change to the next level.
Secondly, although the digital sector is already working to reduce its own emissions, tech businesses need to make even greater efforts. Although digital solutions are often cleaner than the alternatives, tech companies are still responsible for significant carbon emissions and need to do more to mitigate these.
Through increasing usage of renewable energy resources, the industry can take a strong lead in accelerating demand. Two recent examples of this are the development of YTL Green Data Center Park in Johor, the first in Malaysia to be powered by renewable solar energy, and Telekom Malaysia securing a Green Electricity Tariff (GET) from TNB for three of its data centers.
Market drivers
PwC’s Global Consumer Insights Pulse Survey 2022 found that ESG factors affect the shopping behaviours of up to half of Malaysian consumers. Young people are particularly tuned into ESG concerns, with millennials and Generation Z significantly more likely to consider ESG in relation to trust, advocacy and purchasing from companies.
In addition, the Edelman Trust Barometer 2022 survey revealed that Malaysians expect CEOs to be the face of change, with 78% of Malaysians saying that business leaders should be personally visible when discussing public policy with external stakeholders or the work their company has done to benefit society. Every digital economy company should play its part as sustainability is, on every level, in the best interests of business.
MDEC leads the way
I am fully committed to encouraging the adoption of sustainable practices across the ecosystem and within MDEC.
Internally, I am determined that MDEC will walk the talk by building ESG into our DNA. An ESG Policy is in development that will outline our approach to better managing the risks and opportunities faced. An independent Materiality Assessment has also been commissioned to identify and assess the specific ESG issues that are critical to the long-term sustainability of MDEC and our stakeholders across the ecosystem. We have also started identifying opportunities for us to build ESG principles into our programmes.
Externally, I do recognise that businesses, particularly SMEs, may find it difficult to translate and relate to climate change and wider sustainability issues, as these can appear to be beyond their grasp. I am determined therefore to enable digital businesses to learn more about this critical topic quickly and to help them to take action. I have already written out to several companies on this topic and will be announcing a new initiative during Malaysia Digital Week in September.
MDEC cannot do this alone. Hence, I would like to urge businesses of all sizes to start raising awareness from within their organisations and to start their journey towards fighting climate change. The future we work for today will benefit the Malaysians of tomorrow.
Certainly, efforts to combat the effects of climate change are not new to Malaysia. Our government has made a strong commitment to boosting our nation’s resilience against the impact of climate change through a series of ambitious goals. Key amongst these is to be climate neutral by 2050, and to reduce greenhouse gas emissions intensity by 45 percent by 2030, based on 2005 emission levels.
Significant action has already been taken across the board, from clean growth to sustainable urbanisation and green finance. Plans have also been announced for the creation of a Malaysian National Adaptation Plan and the ramping up of Environmental, Social and Governance (or ESG) related strategies.
Digital action equals climate action
Through the new national strategic initiative, Malaysia Digital, MDEC will play a pivotal role in positioning the digital economy at the heart of the nation's shift to more sustainable economic practices. The role of the private sector in championing sustainable practices is crucial to achieving this in two main ways.
Firstly, the World Economic Forum recognises the important role that the digital economy must play in addressing climate change. Digital tech solutions have the potential to reduce GHG emissions by up to 15% by 2030, including through solutions in energy, manufacturing, agriculture, buildings, services, transportation, and traffic management. This corresponds to more than the current carbon footprints of the European Union and the US combined.
Undoubtedly, digitalisation is already transforming the global economy and unleashing powerful forces in every industry. But I believe that it is through the Fourth Industrial Revolution – including technological advances such as 5G, the Internet of Things (IoT) and artificial intelligence (AI) – that the digital sector can take the pace of change to the next level.
Secondly, although the digital sector is already working to reduce its own emissions, tech businesses need to make even greater efforts. Although digital solutions are often cleaner than the alternatives, tech companies are still responsible for significant carbon emissions and need to do more to mitigate these.
Through increasing usage of renewable energy resources, the industry can take a strong lead in accelerating demand. Two recent examples of this are the development of YTL Green Data Center Park in Johor, the first in Malaysia to be powered by renewable solar energy, and Telekom Malaysia securing a Green Electricity Tariff (GET) from TNB for three of its data centers.
Market drivers
PwC’s Global Consumer Insights Pulse Survey 2022 found that ESG factors affect the shopping behaviours of up to half of Malaysian consumers. Young people are particularly tuned into ESG concerns, with millennials and Generation Z significantly more likely to consider ESG in relation to trust, advocacy and purchasing from companies.
In addition, the Edelman Trust Barometer 2022 survey revealed that Malaysians expect CEOs to be the face of change, with 78% of Malaysians saying that business leaders should be personally visible when discussing public policy with external stakeholders or the work their company has done to benefit society. Every digital economy company should play its part as sustainability is, on every level, in the best interests of business.
MDEC leads the way
I am fully committed to encouraging the adoption of sustainable practices across the ecosystem and within MDEC.
Internally, I am determined that MDEC will walk the talk by building ESG into our DNA. An ESG Policy is in development that will outline our approach to better managing the risks and opportunities faced. An independent Materiality Assessment has also been commissioned to identify and assess the specific ESG issues that are critical to the long-term sustainability of MDEC and our stakeholders across the ecosystem. We have also started identifying opportunities for us to build ESG principles into our programmes.
Externally, I do recognise that businesses, particularly SMEs, may find it difficult to translate and relate to climate change and wider sustainability issues, as these can appear to be beyond their grasp. I am determined therefore to enable digital businesses to learn more about this critical topic quickly and to help them to take action. I have already written out to several companies on this topic and will be announcing a new initiative during Malaysia Digital Week in September.
MDEC cannot do this alone. Hence, I would like to urge businesses of all sizes to start raising awareness from within their organisations and to start their journey towards fighting climate change. The future we work for today will benefit the Malaysians of tomorrow.