KUALA LUMPUR: Plantation companies should improve transparency and accountability in their environmental, social and governance (ESG) reporting to enhance credibility, says an academician.
Universiti Teknologi MARA (UiTM) Faculty of Accountancy Associate Prof Dr Seri Ayu Masuri Md Daud said that findings from her team’s research on environmental disclosure in the plantation industry, which she spearheaded, revealed that despite environmental concerns, the majority of environmental reporting by plantation firms remains dominated by “soft” information such as vision statements and general environmental initiatives.
“This type of reporting often lacks the depth and specificity required to provide stakeholders with a clear understanding of the company’s environmental impact and management practices,” Seri Ayu Masuri told Bernama.
In her view, the most significant challenges and criticisms of current ESG practices include greenwashing and the aspirational gap.
In jurisdictions where sustainability reporting is mandatory, like Malaysia, she said that a significant challenge lies in bridging the gap between companies’ aspirations and their actual ESG performance.
“To address this, robust rules must be established to combat both corporate and institutional investor greenwashing, thereby safeguarding stakeholder interests.
“For example, measures should be implemented to prevent institutional investors from misleadingly labelling funds as ESG-compliant when they fail to adhere to ESG principles,” Seri Ayu Masuri said.
She said that a lack of uniform ESG reporting standards further compounded the problem.
