See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/340666338

Research on Sustainable Development in Malaysia

Cover Page · April 2020

CITATIONS READS

0 20

1 author:

Khalidah Khalid Ali

Universiti Teknologi PETRONAS
15 PUBLICATIONS   26 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Research on Ethics and Social Responsibility Students, Jan Sem 2017 View project

Social Sustainability - Conflict of Interest View project

All content following this page was uploaded by Khalidah Khalid Ali on 16 April 2020.

The user has requested enhancement of the downloaded file.

Research on Sustainable
Development in Malaysia
 Research on
Sustainable
Development in
Malaysia

Editors
Zulkipli Ghazali
Muhammad Zahid

UNIVERSITI TEKNOLOGI PETRONAS

Seri Iskandar l 2019
Research on Sustainable Development in Malaysia

© Universiti Teknologi PETRONAS, 2019

All rights reserved. No part of this publication may be reproduced or

transmitted in any form or by any means, including photocopying and
recording, without the written permission of the copyright holder, application
for which should be addressed to Universiti Teknologi PETRONAS. Such
written permission must also be obtained before any part of this publication
is stored in a retrieval system of any nature.

The publisher, authors, contributors and endorsers of this publication each

excludes liability for loss suffered by any person resulting in any way from
the use of, or reliance on this publication.

Published by
UTP Press
Universiti Teknologi PETRONAS,
Owned by Institute of Technology PETRONAS Sdn. Bhd.
32610 Seri Iskandar, Perak Darul Ridzuan, Malaysia

Perpustakaan Negara Malaysia Cataloguing-in-Publication Data

Research on Sustainable Development in Malaysia/Editors: Zulkipli Ghazali,

Muhammad Zahid.
Mode of access: Internet
eISBN 978-967-2048-21-3
1. Sustainable development--Research--Malaysia.
2. Sustainability--Research--Malaysia.
3. Sustainable living--Research--Malaysia.
4. Electronic books.
I. Zulkipli Ghazali.
II. Muhammad Zahid.
338.9270720595
 CONTENTS

Preface vii
Introduction ix

Environmental Social and Governance (ESG) Practices 1

and Regulatory Reforms: Fresh Evidence from an
Emerging Market
Muhammad Zahid, Zulkipli Ghazali

Corporate Governance, Enterprise Risk and Sustainability 19

Management Practices and their Impact on Firm
Performance: An Integrated Framework
Muhammad Khasif Shad, Fong-Woon Lai

Strategic Influence of Corporate Governance on the 35

4Ps (People, Planet, Prosperity and Progress) within the
landscape of the Malaysian Oil and Gas PLCs
Dayana Matsura Baharudin, Mohd Yussof Ibrahim

Influence of Tax Incentive on Investment Climate of 59

Marginal Oil Fields: The Mediating Role of Attractive
Petroleum Fiscal Regime
Abdulsalam Mas’ud, Nor Aziah Abdul Manaf, Natrah Saad

The Corporate Social Responsibility (CSR) Reporting 85

Practice of Environmental Sensitive Companies in
Malaysia
Ho Jie Min, Anbalagan Krishnan. Atiqur Rahman Khan,
Ricardo Baba, Rajalingam Sokkalingam
Ranking of Stakeholders Concerns on CO2 Capture and 109
Storage Technology Adoption using Fuzzy Delphi Method
Tan Siok Kee, Zulkipli Ghazali, Mohammad Ridhuan Tony Lim
Abdullah, Muhammad Zahid

The Prisms of Conflict of Interest in the Malaysian 149

Ecosystem: A Discourse Study105
Khalidah Khalid Ali, Mohd Nizam Mohd Ali

List of Authors 177

Index 185
 PREFACE

As Malaysia propels towards achieving the status of the developed

nation, the social expectations towards the environment, social and
governance (ESG) is growing. Generally, the term “sustainability”
is used to discuss the environment, social issues and governance.
Similarly, the term Corporate Social Responsibility (CSR) is used to
reflect a company’s responsibility for its social and environmental
impacts and how companies evaluate and manage these impacts. In
essence, CSR disclosure is a form of reporting the companies’ ESG
practices. With the increase in awareness of the stakeholders on the
importance of ESG to the well-being, environmental sustainability
and corporate bottom-line, the stakeholders’ accessibility to
transparent and valuable information about companies’ practices
relating to ESG is not an option now. Correspondingly, companies
are aware that ESG disclosure is critical to portray their excellent
reputation and image in meeting the challenge of green issues to their
stakeholders. Stakeholders recognise, and research has shown that
ESG responsibilities of a company are integral to its performance
and long-term sustainability. We are seeing an increasing trend of
disclosing ESG practices among companies. By and large, these
companies highlight reputation gains, increasing investor confidence,
efficient use of resources and can remain competitive. However,
ESG disclosure practices are at the infancy stage in many Malaysian
companies. Perhaps, the regulatory push is crucial to increase the
level of disclosure of ESG practices. Besides, government incentives
through awards, tax rebates and subsidies could be other factors that
have a positive influence to improve these practices.
This book is an inaugural publication of a series of books on the
environment, social and governance. It is aimed to create greater
awareness of ESG practices among companies in Malaysia. Moreover,
this book also highlights the effect of sustainability management
practices on enterprise risk management (ERM) implementation,
corporate governance practices and firm’s performance in the oil and
gas industry. The impact of selected corporate governance mechanism
was also reported with a focus on the Board Audit Committee. Also,
the impact of Corporate Social Responsibility (CSR) activities
on Corporate Financial Performance (CFP) of the Malaysian
environmental sensitive companies was highlighted. Furthermore, the
intervening role of attractive petroleum fiscal regime on tax incentives
and tax investment climate was reported. The ranking of stakeholders’
concerns on social, economic, environment, technical and legislative
implications of CCS technology adoption using the Fuzzy Delphi
Method (FDM) was also reported. The compilation of research papers
demonstrates the pro-active role of academics, and researchers in
propagating the awareness and serving as a platform to facilitate the
adoption of ESG initiatives by the corporate sectors. This initiative is
significant in improving the living standard and quality of life from the
viewpoint of environmental, social, and governance.

Zulkipli Ghazali, Muhammad Zahid

Seri Iskandar, 2019
 INTRODUCTION

Sustainable development is a multi-domain issue that include the

dynamics of policies, regulations, economic, social, environmental
and technological aspects. Continuous participation from various
stakeholders are pertinent in seeing legitimate aspiration of
sustainable development in Malaysia. This book is an amalgamation
of few researches that have been carried out in the various aspects of
Environmental, Social and Governance in the context of sustainable
development in Malaysia. Among others, the research topics include:

1. Environmental Social and Governance (ESG) Practices and

Regulatory Reforms
2. Corporate Governance, Enterprise Risk and Sustainability
Management Practices
3. Influence of Corporate Governance on People, Planet, Prosperity
and Progress
4. Tax Incentive on Investment Climate of Marginal Oil Fields

5. Corporate Social Responsibility (CSR) Reporting Practice of

Companies in Malaysia
6. Carbon dioxide (CO₂) Capture and Storage Technology
Adoption
7. Conflict of Interest in the Malaysian Ecosystem
Muhammad Zahid, Zulkipli Ghazali

The book highlights the level of Environmental Social and Governance

(ESG) Practices and Regulatory Reforms in Malaysian public listed
companies. The Malaysian Code on Corporate Governance (MCCG)
2012 has central role in improving the level of ESG practices in
Malaysia. This provides valuable insight for the relevant authorities
such as Bursa Malaysia, security commission and other regulatory
bodies and the government of Malaysia to enhance the level of
ESG practices in the corporate sector as the country is moving
towards sustainable industrialization. The book also reveals the
evidence that sustainable development requires the antecedents of
efficient Corporate Governance, Enterprise Risk and Sustainability
Management Practices.

Within the landscape of the Malaysian Oil and Gas public listed
companies in Malaysia, the corporate governance practices have
strategic influence on People, Planet, Prosperity and Progress. The
relationship between corporate governance and the quadruple bottom-
line sustainability performance was proven to be significant through
the lens of the agency theory, stakeholder theory, resource dependency
theory and the upper echelon theory. The study investigated the
impact of corporate governance mechanism namely the Board Audit
Committee on each dimension of sustainability performance (Triple
Bottom-Line), as defined by the GRI framework together with an
additional fourth bottom-line element of progress. Capital investment
by the oil companies in Malaysia is huge. This is brought by the
attractive petroleum fiscal regime, tax incentive and the investment
climate of marginal oil fields in Malaysia. Through this background,
further investment for sustainable development among the oil
companies can be stimulated.

The Corporate Social Responsibility (CSR) Reporting Practice has

significant positive impact on Corporate Financial Performance (CFP)
among the Malaysian environmental sensitive companies. While past
research identified employee relations, product quality, community
involvement and environment issues as the main CSR dimensions, the
potential impacts of workplace diversity on CSR is also ascertained.

Carbon capture and storage (CCS) technology is a solution to alleviate

greenhouse gas emissions (namely CO2) and thus drastically reduce
the influence on climate change that commonly suitable for electric
 Introduction

power generating plants, oil and gas refineries and other large
industries that uses oil and gas as their source of energy. However,
this technology is large-scale and capital intensive. The impact of the
technology adoption on the stakeholders should not be underestimated.
Stakeholders’ concerns on social, economic, environment, technical
and legislative implications of CCS technology adoption serve as
guideline to the government for CCS-related policy recommendation
in Malaysia.

Last but not least, conflict of interest is a universal issue affecting

social justice and sustainability. Equitable sustainable development
within the Malaysian society will not be achieved unless and until
conflict of interest is brought to the level within control. This is only
achievable through a strong moral Malaysian society while striving
to be a developed nation. Impactful initiatives through strategic
and collaborative efforts at multiple levels need to be continuously
undertaken to create further public awareness that corruption is
wrongful and detrimental to nation building and sustainability.

View publication stats