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Green logistics: What ESG means for businesses in Malaysia

21 November 2023 3 Mins Read

In an era in which global warming and sustainability have become crucial concerns, businesses around the world are looking for ways to reduce their environmental impact. Malaysia is no exception, with companies here beginning to embrace Environmental, Social, and Governance (ESG) principles as well as green logistics practices that can help reduce emissions and environmental damage from transportation.

ESG meaning: What is ESG

ESG is an approach adopted by many businesses in Malaysia to measure the sustainability performance of a company or an organisation. It emphasises corporate social responsibility, environmental stewardship and good corporate governance when making decisions.

This falls in line with one of the key themes of the 12th Malaysia Plan ‘advancing sustainability’, which outlines its aspirations to become a carbon-neutral country by 2050. According to The Star, Malaysia is the only ASEAN country that introduced a voluntary carbon market in its Budget 2022, setting a platform for carbon credit trading between green asset owners and other entities transitioning towards low-carbon practices.

Benefits of incorporating ESG

Companies that take a proactive stance towards coming up with a sustainability strategy and embracing sound ESG principles can reap significant rewards, including:

1. Higher cost savings

Implementing sustainable practices such as reducing waste and incorporating sustainable packaging can lead to significant cost savings for companies due to better resource management.

2. Increased competitiveness

With greater cost savings from adopting ESG practices, green businesses in Malaysia stay ahead of the curve and also gain a competitive advantage, particularly in industries like logistics where sustainability and social responsibility are becoming increasingly important.

Additionally, by taking a long-term view on ESG, companies can minimise their exposure to financial and operational risks, ensuring their sustainability for the future.

3. Improved reputation and brand loyalty

Other than greater cost savings and increased competitiveness, businesses that demonstrate a commitment to ESG principles can also improve their reputation and build trust among stakeholders.

When a company appears to be devoted to green logistics and ESG goals, it instills confidence in employees, customers, investors, and the general public that their money is going towards something meaningful. As such, brand trust can often be improved.

With both the public and Malaysian government increasingly taking a keen interest in corporate policies regarding sustainability, diversity, and good governance practices, it is becoming important for businesses in Malaysia to consider ESG as a key aspect of their operations and decision-making processes.

So, how can companies in Malaysia do so?

How can businesses in Malaysia incorporate ESG into their company practices

Incorporating ESG into business practices can help companies ensure sustainable growth and improve their reputation. Here are three tips for companies looking to come up with a sustainability strategy and integrate ESG into their operations:

1. Assess your impact and set goals accordingly

Conduct a thorough review of your current operations to understand the environmental, social, and governance impact of your business. This will help you identify areas where you can improve and develop a plan for incorporating ESG principles into your operations.

Next, set measurable ESG goals and targets that align with your business objectives. This could include reducing emissions, improving workplace diversity, or incorporating sustainability packaging for your e-commerce business.

2. Engage stakeholders

Next, engage with stakeholders, including employees, customers, suppliers, and investors in Malaysia, to understand their ESG expectations and how they can support your ESG efforts.

3. Collaborate with supply chain partners like DHL Express

Last but not least, partner with your supply chain management partners like DHL Express to jointly address ESG challenges and share best practices.

The supply chain is a complex network of suppliers, manufacturers, distributors, and other partners that contribute to a company's operations. As such, it has a significant impact on a company's environmental and social footprint as well as its governance practices. Incorporating ESG into supply chain management helps companies to increase transparency and reduce their environmental footprint.

For example, DHL Express provides eco-friendly transportation solutions to fulfill your needs, including reducing or eliminating logistics-related emissions, waste, and other negative environmental effects throughout your entire supply chain.

DHL Online Calculator helps you to assess carbon emissions for a single shipment instantly and/or evaluate the potential effect of mode shifts and route modifications.

Meanwhile, DHL GoGreen Offsetting compensates the emissions from your transportation and logistics operations through contributions to our climate protection projects worldwide. The emissions are calculated using the same carbon accounting standards used for our own emissions calculations and are subject to third-party verification.

Find out more about our GoGreen solutions and work with DHL Express to contribute to a more sustainable and responsible future today.