Yinson Holdings Bhd has emerged as the gold winner in the energy sector at The Edge Malaysia ESG Awards 2022, thanks in part to its commitment to clean energy solutions. Group CEO Lim Chern Yuan says the award is a validation of the hard work and commitment of the company and its subsidiaries.

“Driving better and more transparent ESG disclosures requires a lot of determination, especially [since we] have operations across multiple geographies with different time zones. In many ways, we feel like we are just getting started. Most of the time, we try to prioritise progress over perfection,” says Lim.

To stay on track, the company set up an ESG task force that meets once every fortnight to track, monitor and discuss how it can do better. The task force’s progress is then reported to its sustainability committee.

“Many of the material ESG issues for our company are also deliberated by our board risk and sustainability committee (BRSC). We are the first company in Malaysia to issue a RM1 billion sustainability-linked bond anchored to sustainability key performance indicators (KPIs), such as renewable energy generation and carbon intensity,” he says.

Driving better and more transparent ESG disclosures requires a lot of determination, especially [since we] have operations across multiple geographies with different time zones. ... we feel like we are just getting started. Most of the time, we try to prioritise progress over perfection. - Lim

“This gives an impetus for us to stay the course and continue to prioritise our ESG performance. Our leadership team is accountable for ESG performance and holds relevant sustainability KPIs.”

Yinson decided to chart its course by focusing on a few strategies. Firstly, the company ensures via “internal action” that material ESG issues are managed. Among other things, this is done by launching its climate roadmap and report, which are aligned with recommendations by the Task Force on Climate-related Financial Disclosures (TCFD).

Additionally, the company reviewed its carbon emissions, energy, water, waste, health and safety data; launched a human rights and labour policy; and implemented its ESG supply chain policy. The leadership team’s bonus is also tied to ESG performance.

Next, through “sustainable business”, the company ensures the products, projects and services offered are sustainable. To achieve this, Yinson Production, for example, has been working on developing zero-emission floating production storage and offloading (FPSO) units, which are the main component of its operations.

Meanwhile, Yinson Greentech offers e-mobility solutions onshore and offshore, and Yinson Renewables focuses on solar and wind development to ensure a seamless transition towards the company’s net-zero agenda, says Lim.

Despite their efforts to achieve sustainability, he acknowledges that wider adoption of ESG is needed for it to become mainstream.

“We need all hands on deck and ensure there is clear alignment from all stakeholders. Governments can play a role in incentivising the adoption of greener solutions or alternatives. Consumers who have strong purchasing power can help by choosing to vote for brands with a strong ESG proposition,” says Lim.

“Investors have a key role in deciding capital allocation and they should demand higher levels of transparency on ESG performance. We would like to see stakeholders leverage ESG as an opportunity rather than seeing it as a constraint.”

Yinson will continue to improve its ESG reporting and ensure double materiality is taken into consideration, he says.

“Recently, we launched our ESG supply chain policy and are excited to work alongside our vendors and suppliers on their decarbonisation journey. We have also reiterated our commitments to the 10 United Nations Global Compact Principles — which cover areas such as human rights, labour, environment and anti-corruption — by becoming a signatory member. We look forward to keeping our stakeholders engaged through our annual [reports] on our progress,” says Lim.