Business strategy for environmental social governance practices: evidence from telecommunication companies in Malaysia

Abstract

Purpose The present digital era has integrated the conventional telecommunications companies as service providers in this ever-competitive environment. Towards gaining business competitiveness, businesses are operated from the stance of dynamic business model that places focus on both economic activities and, more importantly, value-added benefits. One essential value embedded into business strategies refers to the aspect of sustainability in conjunction to environmental social governance (ESG). Within the context of Malaysia, ESG practices have been expected to grow rapidly in years to come, along with the vision of becoming a digital economy nation, by 2050. The continuous discussions appear to support the significance of implementing ESG practices amidst organizations, which in turn, could enhance a more sustainable economic growth for the country. Although many studies have probed into the dimensions of ESG, little attention has been given to the ESG practices incorporated into business strategy agenda. Design/methodology/approach This paper combed through the literature to retrieve the multi-dimensions of ESG concepts, as well as related in-depth insights into ESG disclosures amongst leading companies established in Malaysia. As for the research design, this study used the content analysis method and the ESG Grid as the benchmarking tool to explore superior commitments amongst its peers. Findings As a result, this study stumbled upon two major outcomes: the pattern of ESG disclosures in telecommunications industry and the approaches in implementing ESG practices in telecommunications companies. These two aspects appear essential to establish a competitive advantage, apart from addressing the issues raised by concerned stakeholders. Research limitations/implications Future studies may explore deeper into comprehending the ESG practices by using the interview method and incorporating other industry or arena. Practical implications The decisions made by the companies to invest in ESG practices mark the ability of a company in devising viable survival strategies within the industry. Originality/value Hence, this study offers several vital insights into the practical value to learn from the best experiences, aside from analyzing the current progress of ESG practices within the context of developing nation.

Key Factors of Successful Corporate Environmental Practice in Selected Malaysia Public Listed Companies

“…The business strategy is vital in engaging corporate environmental practice to lower operating costs and emissions, enhance the reputation, obtain approval for operating license and boost stakeholder engagement. Besides, drivers, strategies and performance measures should be integrated into the business operation (Jasni, Yusoff, Zain, Md Yusoff, & Shaffee, 2019). This is also considering risk minimisation and operational efficiency, as the impacts were factored into daily operations and compliance.…”

Connecting Malaysia

“…ESG is being toted as one such key. Jasni et al (2019) have shown that ESG practices have been linked in other major studies to a decrease in risk-taking behavior of companies. This in turn has led to high-performing ESG companies to have a lower risk in terms of weighted-average cost of capital, meaning they are better able to generate sustainable investment returns.…”

“…ESG comprises stakeholder concerns around the environment, such as how the company can minimize waste and their carbon footprint, society, including socially considerate employment and workplace safety, and governance, which focuses on issues such as corporate fraud. According to Jasni et al (2019), ESG has begun evolving towards a new economic model – socially responsible investing (SRI). Performing well in the ESG Index allows potential investors to identify a company as a possible good investment, and this can only be achieved through wholesale embracing of ESG practices based on stakeholder expectations.…”

Environmental, Social, and Governance Integration into the Business Model: Literature Review and Research Agenda

“…Sustainability in the oil and gas industry is a replication of the business model and the indicators of sustainable business models in this sector through production, reserve replacement percentage, gas sales, capacity, and sales. An investigation of ESG practices in the telecommunications business strategies of four Malaysian companies in 2015-using the content analysis methodology of annual reporting-described the business model as a dynamic model that copes with economic activities and presents ESG issues to stakeholders [91].…”