Innovative companies prioritise sustainability, social responsibility: RSM

This comes amidst the growing need for businesses to promote ESG compliance amongst their stakeholders.

Dato’ Robert Teo is the founder of professional practice firm RSM Malaysia PLT, a member of the RSM International network of professional firms providing audit, tax, and consulting services. He has more than 40 years of experience in the fields of corporate taxation, audit assurance and corporate restructuring. His specialised industry knowledge lies in property development and construction with a focus on tax planning.

Teo had his early career with Turquand Barton Mayhew, London, which subsequently merged to become Ernst & Young.

Apart from his professional practice, he is actively involved in the Boards of various Chambers of Commerce. Teo is also a member of the Board of Trustees of the Malaysian Nature Society, which is Malaysia’s foremost non-profit organisation dedicated to the protection and conservation of the country’s natural heritage.

Teo provided his insights to Asian Business Review on the performance of Malaysia’s business landscape in the past year. According to him, export-centric industries will take the lead in view of the disruptions in the global chip supply chain – this highlights the manufacturing sector, which includes electrical and electronics, furniture, and metal-related segments.

This analysis comes as the recently announced Budget 2023 by the Malaysian government announced that the domestic manufacturing sector is expected to grow at 3.9% this year.

In line with this, he noted that the services industry like the food-related segment will benefit from higher private consumption and improvements in the tourism industry as Malaysia is now opening fully for businesses. 

He added that the construction industry is improving, but is going to continue facing challenges of lacking foreign workers, increased logistical and material costs; the agricultural industry has been growing due to better commodity pricing and demands for food due to war, conflicts and climate changes; whilst, the oil and gas sector will continue to grow due to global demands of energies and Russia-Ukraine wars.

“Struggling industries should continue to invest in talents, re-invent themselves in business models and acquire new technologies to continue increasing productivity. Promote innovations too in order to survive in this ever-increasing global competition,” Teo said.

On the other hand, as more companies explore digital transformation, Teo said that companies also need to change to survive and to improve efficiency, increase productivity and customer experience.

“Companies need to have solutions or invest in cybersecurity measures in facing new challenges in cybersecurity, data security and privacy. Due to shortage of talents, this limits the capability of companies to meet the challenges of intensified global competition and their capacity for technology management and knowledge acquisition,” he explained.

Promoting ESG compliance 

With increased demands for the adoption of sustainability, social responsibility, and ESG compliance, Malaysian businesses are expected to prioritise these values into their respective strategies as these initiatives are crucial to ensuring their long-term success and impact.

The RSM leader noted that businesses should establish clear goals and objectives for their ESG and sustainability initiatives, including measurable targets and timelines. He mentioned this can be done by developing ESG policies and procedures, setting targets, and measuring progress towards achieving these targets.

“Regular monitoring and evaluation of ESG and sustainability initiatives can help businesses in Malaysia to identify areas for improvement and make adjustments as needed,” Teo said.

He also pointed out that organisations should communicate their performance to stakeholders, including customers, investors, and employees, and they should also engage with these stakeholders regarding issues surrounding ESG. 

“Engaging with stakeholders is important to maintaining ESG and sustainability initiatives over time. This includes ongoing communication, consultation, and collaboration with stakeholders to understand their needs and expectations and to build relationships based on mutual trust and respect,” Teo said.

As one of the judges for this year’s Malaysia International Business Awards and National Business Awards, he noted that sustainability and social responsibility are some of the key qualities that need to be considered.

“[Innovative companies] recognise the importance of balancing profit with a commitment to the environment and society, and seek to create products and services that are both innovative and socially responsible,” Teo said.