driving the sustainability agenda with you · value through risk management, revenue growth, and...

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Driving thesustainability agendawith you

PwC Malaysia S&CCCapability Statement

March 2013

Sustainability is evolving, from managingrisks, to capturing opportunities

Most organisations know sustainability isan area that can no longer be ignored, butmany have different levels of awareness.Whether driven by corporate conscience,stakeholder pressure or regulation, allrecognise that action has to be taken now.

Sustainability considerations have movedway beyond philanthropy and ethics. Theygo to the heart of corporate strategy andcompetitive advantage.

Leadership through innovation...

Companies are increasingly seeking to embedsustainability in an innovative way – linkingremuneration to sustainability, publishingenvironmental profit and loss statements, orintegrating financial and non-financialreporting.

Opportunity

Operational effectiveness Strategic advantage

Risk

Operational risk

Regulatorycompliance

Reputational risk

Operations costsavings

Supply chain costsavings

Implement reportingsystems

Product innovation

Increasing marketshare

Brand enhancement

Value Protection

Value Creation

INCREASINGVALUE

Risk ManagementWhere many organisationsstart

Compliance & riskmanagement

Operational efficiencyWhere some organisationsare heading

Revenue growthWhere leaders are heading

There is a journey to sustainability, which gives us opportunities to work with youacross a number of issues such as climate change, green growth, sustainable financeand resource scarcity.

PwC | Driving business value through sustainability

How can we help

A. Strategic sustainability

Generating, assessing or aligning your sustainabilitystrategy to make the most of your sustainableinitiatives

What is becoming increasingly evident is that a soundsustainability strategy leads to long-term growth and profitability.

We can help you:• identify the sustainability issues and risks that matter most to your stakeholders• assess which of these issues would bring the most value to your company, society

and the environment• identify your issues and goals to determine what needs to be done to make your

business more sustainable• define your sustainability vision to support your corporate strategy and develop a

strategy roadmap and implementation plan

B. Climate change and carbon managementHelping you anticipate changes in markets and policy,manage climate change risks and respondto opportunitiesto opportunities

The world’s economies increasingly realise that a moreactive and diverse approach is needed to address climatechange through the low carbon agenda.

Carbon measurement and reporting reveals how emerging risks can be opportunitiesrather than threats if they are managed for competitive advantage – this is critical ina carbon-constrained world.

We can help you perform an in-depth review of your current carbon position – frommeasuring your carbon footprint to assessing the effectiveness of reporting and howit measures up to leading practice.

C. Sustainability assurance and reporting

Assisting you with non-financial informationframeworks, reporting and assurance furtheringefforts to influence stakeholder trust

Bursa Malaysia mandates a disclosure on corporate socialresponsibility (CSR) by public listed companies in theirannual reports. Stock exchanges such as Bursa Malaysia are launching morestringent sustainability reporting requirements and indices, which will encouragecompanies to improve their disclosure on environmental, social and corporategovernance practices.

We can help you verify and ensure credibility of data in your sustainability reportthrough assurance and verification.


D. Tax and the regulatory environment

Assessing your exposure to environmental tax andregulation while advising on relevant incentives orsubsidies to optimise your tax position

Tax implications of all your business activities need to beconsidered, whether you are grappling with renewables investmentor new business issues, such as carbon trading schemes and changing businessmodels.

Equally important is the need to understand and analyse the impact of taxes andregulations.

E. Sustainability governance, risk and compliance

Working with you to set up or realign your structure,policies, or procedures to reduce reputational riskand ensure compliance

There is a growing need to establish governance aroundsustainability to manage risk and ensure compliance.

We can help you:• develop codes of conduct and policies and procedures to meet your stakeholders’

expectations• manage risk and regulatory compliance• outline the roles and responsibilities in the new governance structure• conduct risk-based benchmarking

F. Sustainable supply chain and operations

Understanding and addressing sustainability impacts inthe supply chain to improve your performance

Understanding the impact of your operations on theenvironment and its impact on the communities in whichyou operate in can drive improvements to corporate strategy,day to day operations and ultimately financial performance.

We can help you:• assess the risks associated with sustainability in your supply chain• define the characteristics you require from your suppliers• monitor and manage environmental, social and governance risks• measure the financial cost or potential impact of your carbon, water and energy

usage on the environment, and local communities


Our services

PwC Malaysia

The effects of climate change arebecoming more evident every day.

From changing weather patterns tomelting ice caps – the examples canbe seen all around us. So what are

you doing to address theimpact of climate change?

Air and water pollution,climate change, energy use,

natural resource depletion andothers affect economicdevelopment. Are you

adopting green growthapproaches that supporteconomic growth while

minimising your negativeimpacts?

Developing regions will be thefastest growing economies,creating opportunities for

private sector investment andpoverty reduction. Are youprepared to improve the

standard of living foremployees, suppliers,

distributors andconsumers?

A

PwC Malaysiasustainability

services

PwC Sustainability Services Issues

Financial services have evolved.Planning for the changes ahead createsopportunities for those who understandthe trends and value natural capital to

build organisational resilience anddrive sustainable returns. Is your

business model still relevant inthe new global economy?

Global markets are competing for resourceslike oil, water, land and agriculturalcommodities. Businesses must build

resilience into their supply chains to managethe effects of resource scarcity. How are

you innovating products andcollaborating with your suppliers to

ensure more efficient use ofresources?


A D

About PwC Malaysia’s sustainability teamIntegrated services that link sustainability to business value

Our global alliances

We believe that collaborating on solutions and converging around standards can onlyhelp to drive the sustainability agenda further. This is why we’ve establishedrelationships with partners such as:

Consultancy of the yearBusinessGreen LeadersAwards 2012

PwC helps organisations and individuals create thevalue they’re looking for. We’re a network of firms in158 countries with more than 180,000 people who arecommitted to delivering quality in assurance, tax andadvisory services. Tell us what matters to you and findout more by visiting us at www.pwc.com.

Our sustainability network of over 700 people in over 60 countries provides expertassistance and advice to governments and the private sector around the world.

Our thought leadership onsustainability

Here’s a selected list of relevant publications.You can download these and more atwww.pwc.com/gx/en/sustainability.

To learn more about our services:

© 2013 PricewaterhouseCoopers Advisory Services Sdn Bhd. All rights reserved. "PricewaterhouseCoopers" and/or "PwC" refers tothe individual members of the PricewaterhouseCoopers organisation in Malaysia, each of which is a separate and independent legalentity. Please see www.pwc.com/structure for further details. CS05391

Jack CunninghamStrategic sustainability servicesPwC Advisory Services Sdn BhdT: +60(3) 2173 0621M: +60(12) 6133 147E: [email protected]

Rashyid AnwarudinClimate change, reporting & assurancePwC Advisory Services Sdn BhdT: +60(3) 2173 0956M: +60(12) 207 1716E: [email protected]

PricewaterhouseCoopers

Advisory Services Sdn Bhd

Level 10, 1 Sentral

Jalan Travers

Kuala Lumpur Sentral

50470 Kuala Lumpur

T: +60(3) 2173 1188

F: +60(3) 2173 1288

http://www.pwc.com/my/sustainability

Strategic Sustainability

What is StrategicSustainability?

• Finding the right sustainabilitydrivers to create or enhancevalue through risk management,revenue growth, and cost

As sustainability moves up the boardroom agenda, it is increasinglybeing integrated into strategic level planning. Management now needs tobalance various pressures, increased regulation, brand protection andsupply chain resilience with the need to enhance performance, using thesustainability agenda for strategic advantage.

Developing and integrating a detailed sustainability vision, goal andvalues into your long-term strategic plan so that it creates lasting value,

Sustainability is evolvingfrom managing risks tocapturing marketopportunities


services

revenue growth, and costreduction

• Defining sustainability vision tosupport corporate strategy anddeveloping a roadmap andimplementation plans to enablevalue creation

values into your long-term strategic plan so that it creates lasting value,is a common challenge for all types of organisations. Doing this by alsobuilding public trust is an additional challenge.

What is evident is that a sound sustainability strategy protects acompany’s reputation, drives innovation and market differentiation andenhances employee engagement. It also satisfies consumers and attracttalent, demonstrates compliance, and communicates progress tostakeholders - all key ingredients for long-term growth and profitability.

Sustainability strategy should be a competitive advantage

Current environment Potential impact on companies

Companies without a sustainability strategy fail to realisetheir full business value and risk appearing out of touch.

When sustainability is viewed as a cost center or lacksalignment with corporate strategy, the businessunderperforms and material risks go unaddressed.

Companies across industries face material business risksand opportunities from regulatory and market trends onenvironment and social issues.

Customers, consumers, employees, regulators and otherstakeholders expect companies to have a clearsustainability strategy and “voice”.

Some companies recognise that their existing sustainabilitystrategies are not creating value or lack alignment withtheir business strategies.

While sustainability leaders are reaping the rewards andpositioning themselves for the future, others are leavingvalue on the table.

How we can help

We can help you to:

• Identify your issues and goals to determine where the pressures arelikely to be and raise awareness of what needs to be done to makeyour business more sustainable

• Prioritise these issues from both a sustainability and commercialpoint of view. This will help you recognise and better manage risks;and improve efficiency, revenue potential, growth, and otheropportunities

• Map the short and long-term ambitions for your sustainabilityvision, goals and values, assess the risks, and address any gaps indelivery

• Support the alignment and integration of your sustainability vision,goals and values into your overall corporate strategy

• Develop and deliver a robust sustainability programme that includesprioritised initiatives, enablers, milestones, key performanceindicators, and measurable targets

Client project Challenge, solution and results

Leading Malaysiantelecommunications

Challenge: Following a Board governance review, a leading Malaysiantelecommunications company sought to develop a CR strategy and framework.

Solution: Our first step was to benchmark local and international companies to identifythe material focus areas for the telecommunications industry as well as local needs.We followed this up with stakeholder discussions to gather feedback on material

Selected case studies in strategic sustainability

What this means for you:

“Whether sustainability isdriven by corporateconscience, pressure fromstakeholders or regulationand taxes, there are hugeopportunities. Companies areslowly beginning to recognisethe strategic importance ofsustainability in managingrisks.”______________________

Jack Cunningham – Associate Director,Sustainability & Climate Change, PwCMalaysia

© 2013 PricewaterhouseCoopers Advisory Services Sdn Bhd. All rights reserved. "PricewaterhouseCoopers" and/or "PwC" refers to the individualmembers of the PricewaterhouseCoopers organisation in Malaysia, each of which is a separate and independent legal entity. Please seewww.pwc.com/structure for further details.CS05391

Contact us for more information

telecommunicationscompany

Corporate responsibility(CR) strategy andmanagement framework

We followed this up with stakeholder discussions to gather feedback on materialsustainability focus areas and to understand the industry’s direction. We also trainedthe client on sustainability and good reporting practices.

Results: The client’s new sustainability initiatives were well coordinated so that itimproved the impact of the company’s CR investments. The client developed its firststandalone CR report, committed to a stakeholder management programme andprovided corporate responsibility key performance indicators updates to the Board.

Regional airline operator

Sustainability strategydevelopment

Challenge: The client needed help in developing their sustainability strategy andframework.

Solution: We started by prioritising the client’s key sustainability focus areas by takinginto account internal and external stakeholder inputs through stakeholder engagementactivities, key aviation industry sustainability risks and issues, and identifying keysustainability value drivers.

Results: We assisted the client in setting annual targets and goals, and developing aroadmap to implement the key sustainability initiatives identified.

Jack CunninghamAssociate DirectorPricewaterhouseCoopers AdvisoryServices Sdn Bhd

T: +60(3) 2173 0621M: +60(12) 6133 [email protected]

PricewaterhouseCoopersAdvisory Services Sdn BhdLevel 10, 1 Sentral, Jalan TraversKuala Lumpur Sentral50470 Kuala Lumpur

T: +60(3) 2173 1188F: +60(3) 2173 1288www.pwc.com/my/sustainability

Rashyid AnwarudinAssociate DirectorPricewaterhouseCoopers AdvisoryServices Sdn Bhd


Climate change & carbonmanagement

Climate change and carbonmanagement involves:

• Measuring and reporting carbonemissions throughout the entire

Yang Amat Berhormat Datuk Seri Najib Tun Razak, Prime Minister ofMalaysia has committed up to 40% reduction in carbon intensity by2020 from 2005 levels. Carbon is often the “de facto” environmentalsustainability issue that countries seek to regulate and it is evident thatthe regulatory landscape is placing greater demands on companies.

Climate change has emerged asone of the most importantpolitical and business issues ofour time*


services

emissions throughout the entirevalue chain

• Identifying climate change risksand opportunities

• Developing and implementingpolicies, strategies andprogrammes on climate change,economics and green growth

the regulatory landscape is placing greater demands on companies.

A practical first step towards carbon management is measuring carbonemissions followed by identifying operational improvement and carbonreduction opportunities.

Whether it’s defining policies, understanding the opportunities,preparing and protecting a business or leading by example, we can helpyou:

• understand the impact of carbon emissions by your business;• form a strategy to address emissions reduction; and• support you through the complex organisational changes needed to

put the strategies in place.

Why should tackling your carbon emissions be importantto you?

• Enables identification of cost saving opportunities throughenergy efficiency of operations and technological innovations.

• Enables reporting and dialogue around emissions and riskswith key stakeholders.

• Improves your brand reputation and addresses customerawareness of issues related to climate change.

• To ensure competitive advantage in the marketplace andfuture-proof your business against new risks such as increasedregulation.

* In our 2013 Going beyondphilanthropy? Pulse-check onsustainability report, 38% ofcompanies in the region said thatenergy and carbon-related costs wastheir top strategic priority over thenext 5 years.

How we can help

We can help you to:

• Understand the data that needs to be collected, the managementinformation systems and processes that need to be in place

• Manage climate change risks and respond to opportunities

• Develop high-level climate change strategies and their practicalimplementation on the ground

• Respond to the Carbon Disclosure Project (CDP) throughcollaborative engagement. PwC has been the global sponsor andadvisor of the CDP since 2008, giving us the insights to:- provide guidance in responding to the CDP and review of the CDP

questionnaire- provide confidence through verification of your climate or

sustainability data before submission to the CDP

Selected case studies in climate change & carbon management


Diversifiedmultinational

Carbon inventory andreduction strategy

Challenge: The client recognised that operations in high impact industries wereespecially risky as they were not in a position to estimate potential financial risks underfuture climate change policies and regulations.

Solution: Firstly, we developed a baseline greenhouse gas (GHG) inventory for theclient’s global operations. Following the completion of the carbon baseline inventory, weidentified opportunities for carbon reduction. The team developed the business case andimplementation roadmaps for various carbon reduction initiatives related to greentechnologies, energy efficiency, renewable energy and operational improvement.


“Organisations need to startmeasuring their carbonemissions before they can takesteps to reduce them. Carbonmanagement does not have tobe tedious or difficult,provided that the right stepsare taken and continuouslyimproved on.”___________________________

Rashyid Anwarudin – AssociateDirector, Sustainability & ClimateChange, PwC Malaysia

© 2013 PricewaterhouseCoopers Advisory Services Sdn Bhd. All rights reserved. "PricewaterhouseCoopers" and/or "PwC" refers to the individualmembers of the PricewaterhouseCoopers organisation in Malaysia, each of which is a separate and independent legal entity. Please seewww.pwc.com/structure for further details.


reduction strategy technologies, energy efficiency, renewable energy and operational improvement.

Results: We were instrumental in the development of carbon reduction strategyroadmaps and performed the calculations to a set carbon reduction target moving forwardthrough initiatives that not only cut carbon emissions but also costs.

Major oleochemicalmanufacturer

Carbon DisclosureProject (CDP) support

Challenge: The client’s buyers had requested it to respond to the CDP supply chainquestionnaire. But the client was unsure how to respond as well as the potentialimplications that responding to the CDP might have on their business.

Solution: Several workshops were conducted to understand CDP's requirements and tosupport the client in developing a carbon inventory. This was followed by reviews of theCDP questionnaire. A strategic evaluation was also conducted to look at how the clientcopes with threats arising from climate change and the potential business implications forresponding to the CDP.

Results: The client obtained a detailed understanding of the CDP, the positiveimplications for disclosure and tools required to provide a meaningful response to theCDP.





Elaine ChanManagerPricewaterhouseCoopers AdvisoryServices Sdn Bhd


Global reporting standards and guidelines:

Sustainability assurance & reporting

What is sustainability assurance & reporting?

Reporting and verifying your company’s environmental, social and governance performance in a standalone sustainability report, within the annual report or integrated reporting.

Alongside the increasing number of sustainability reports and the reporting of carbon emissions by companies, is a growing tendency to obtain independent assurance, either for regulatory or voluntary purposes. The assurance can be public - designed to underline credibility to external audiences - or private and intended to give confidence to management and the board that they are doing the right thing. However, unlike financial accounting, the collection of sustainability related information and the production of reports and integrated reporting is relatively new. This creates the opportunity – or challenge – for businesses to report consistent, reliable and complete data on a routine basis. Assurance for the sustainability report ensures credibility of data.

Sustainability reporting is voluntary, but there is an increasing move by governments to make it mandatory. They recognise that a resilient economic system is one that accounts for long-term risks, including environmental, social and economic impacts

PwC Malaysia sustainability

services

Better manage

stakeholder

relationships

Key

benefits

Demonstrate

commitment &

transparency

Increase trust

& support from

key

stakeholders

Form strategic

partnerships

Increase external

& internal

acceptance of

material issues

Manage social

expectations

Encourage

further sharing

of ideas and

feedback

Give different

views of an

organisation’s

strengths &

weaknesses

Assurance &

reporting brings

significant

benefits to an

organisation

How we can help

© 2013 PricewaterhouseCoopers Advisory Services Sdn Bhd. All rights reserved. "PricewaterhouseCoopers" and/or "PwC" refers to the individual

members of the PricewaterhouseCoopers organisation in Malaysia, each of which is a separate and independent legal entity. Please see

www.pwc.com/structure for further details.

Our experienced team can help you to:

• Undertake internal audits to gauge the effectiveness of your internal controls and measures

• Provide independent assurance of the data in your sustainability report against ISAE 3000 as well as assurance for regulatory performance purposes, such as the Carbon Disclosure Project (CDP), Greenhouse Gas (GHG) emissions; we’ll also verify and certify your data against social and environmental benchmarks in line with market standards like the Global Reporting Initiative (GRI), GHG Protocol, and AA1000

• Support your submissions to sustainability indices by helping you to interpret the questionnaire before submission; we'll also identify any gaps to improve your position in the rankings

• Review your current reporting against best practices, identify operational improvements and move it beyond compliance to include future-looking analysis and strategies

• Align measurable sustainability objectives with your corporate strategy based on financial, operational and regulatory performance measures

• Assess how the life cycle of your products and services might impact your sustainability goals

Selected case studies in assurance & reporting


Food and beverage company

Sustainability assurance

Challenge: We were engaged to provide assurance services for the client for their 2010 Creating Shared Value (CSV) Report according to ISAE 3000 against the GRI-G3 guidelines and the company’s internal sustainability reporting guidelines.

Solution: We engaged local communities, societies and NGOs to verify data reported in the areas of rural and social development, biodiversity and the environment.

Results: As well as providing assurance, our team reviewed the 2010 CSV Report to verify its GRI application level.

Malaysian tele-communications operator

Sustainability assurance

Challenge: We were engaged to provide assurance services for the company’s 2011 Sustainability Report according to ISAE 3000 against the GRI-G3.1 guidelines and the company’s internal sustainability reporting guidelines.

Solution: We conducted interviews with key personnel involved in the sustainability reporting and data collection process. We also conducted sample checks of source documents to verify 6 key performance indicators related to Health & Safety, Training & Development, Environment, Community and Suppliers.

Results: As well as providing assurance, our team reviewed the 2011 Sustainability Report to verify its GRI application level.


“As more companies commit to responding to global and national climate change challenges and start to understand the business value of it, we expect Malaysia’s participation in global reporting initiatives to increase. Many Malaysian companies are already taking steps to report on their climate change efforts, but undeniably there’s still much to be done.” ______________________

Rashyid Anwarudin – Associate Director, Sustainability & Climate Change, PwC Malaysia


Jack Cunningham Associate Director PricewaterhouseCoopers Advisory Services Sdn Bhd

T: +60(3) 2173 0621 M: +60(12) 6133 147 [email protected]

PricewaterhouseCoopers Advisory Services Sdn Bhd Level 10, 1 Sentral, Jalan Travers Kuala Lumpur Sentral 50470 Kuala Lumpur

T: +60(3) 2173 1188 F: +60(3) 2173 1288 www.pwc.com/my/sustainability

Rashyid Anwarudin Associate Director PricewaterhouseCoopers Advisory Services Sdn Bhd

T: +60(3) 2173 0956 M: +60(12) 207 1716 [email protected]

Tax & the regulatoryenvironment

What is the currentregulatory environment?

Tax and incentives are integral to the sustainability and climatechange debate. Environmental taxes and regulations are constantlyincreasing in number and scope, and evolving as more countries


services

Green taxation is used bygovernments to encourage moresustainable use of resources,presenting businesses with bothnew opportunities and new risks

• Green Building Index (GBI)A green rating tool developedfor Malaysian buildings, withtax incentives applicable tocertified buildings

• Carbon and taxTax implications connected withits acquisition, holding, disposaland utilisation

• Environmental incentivesA series of tax incentives hasbeen introduced to encourage alow-carbon economy

increasing in number and scope, and evolving as more countriesintroduce them. Add into the mix the implications of changing policy,such as the rapid increase in the prevalence of new carbon tradingschemes and other environmental regulations around the world, andthe importance of understanding and analysing the impact of taxesand regulations in this area becomes clear.

It is important that you clearly understand their impact on yourexisting and planned business operations so that you can makeinformed strategic decisions and take advantage of emergingopportunities to reduce costs.

Local governments are continuing to implement measuresto deal with the issues of sustainability and climatechange. The opportunity exists for environmental taxes toplay a significant role in shaping both business strategiesand operational decisions aimed at encouragingsustainable business activities. Failure to understandthese taxes and their impact on businesses could lead tomismanagement of environmental costs and realisation offinancial, operational and reputational risks.

How we can help

Our global network of sustainability and climate change taxspecialists can help you to:

• Assess your current global exposure to environmental taxes andregulations; help you to manage risks and optimise your tax positionfrom a sustainability perspective; and proactively engage withregional policy makers

• Understand your sustainability compliance obligations and takeadvantage of subsidies, grants, taxes and other incentives; developstrategies that optimise the impact of carbon, climate change andresource scarcity on your tax position; and prepare for future policydevelopments

• Understand your tax department’s role in supporting yoursustainability strategy and making sure your sustainabilityinvestments are evaluated on an after-tax basis, with availableincentives factored into your financial returns

• Enhance your corporate reputation directly through sustainability-focused initiatives, and indirectly through your Total TaxContribution

Selected case studies in tax & the regulatory environment


Local financial

Challenge: Develop a Green Technology Financing Report for a closed door conferencethat was jointly organised with the local financial regulator and attended by green industryplayers, bankers and green technology specialists.

Solution: Our team prepared a comprehensive report documenting the overview of green


“The Malaysian governmenthas actively introducedinitiatives to promote theadoption of green technology,and this gives rise to manybusiness opportunities whichshould be grasped tomaximise the financialbenefits.”

______________________

Rashyid Anwarudin – AssociateDirector, Sustainability & ClimateChange, PwC Malaysia

Local financialindustry associationand local regulator

Green TechnologyFinancing Conferencereport

Solution: Our team prepared a comprehensive report documenting the overview of greentechnology sectors in Malaysia and four other countries. We did thorough research on thesize of the green technology market, trend analysis, key players, growth simulationprogrammes and high-level analysis of financial institutions supporting the green industry.

Results: The final report incorporated our research on other countries, PwC’s notes andobservations from the conference, as well as feedback from the client and its appointedgreen technology specialist.

Government ministry

Study on greentechnologyinvestments in theMalaysianmanufacturing sector

Challenge: Develop a study to help the client understand the landscape of currentincentives for the uptake of green technology in the manufacturing sector as well as whatmore can be done to attract green technology investments in the sector.

Solution: Our team engaged key stakeholders from various private and public organisationsfor interviews and focus group discussions. An electronic survey that targeted up to onethousand companies within the manufacturing sector was deployed. The findings wereconsolidated and used as an input in developing the recommendations for the final report.

Results: The final report consists of immediate and long-term recommendations thatcomprise of enablers, policies, incentives and frameworks that can be used by the client topromote green technology investments in Malaysia's manufacturing sector.









Sustainability governance,risk & compliance

What is sustainabilitygovernance?

Governance describes themanagement of sustainabilityacross all aspects of an

As businesses face more restrictions on the materials they use, there isa growing need to establish governance around sustainability tomanage risk and to ensure compliance. National and internationalcompanies trying to meet these standards or regulations can findthemselves in a minefield as they navigate the areas of governance,risk, and compliance.


services

Setting up or realigning yourstructure, policies orprocedures will help tominimise reputational riskand to ensure compliance

across all aspects of anorganisation, including employeecapability, policies and procedures,organisational structure andtechnology

risk, and compliance.

Good governance builds transparent practices and establishes trustingrelationships between managers, shareholders, and stakeholders. Italso allows an organisation to forecast and monitor potential risksbetter. Businesses are also able to manage the risks of operatingwithin global supply chains more effectively, in an effort to protectbrand reputation and to comply with the various nationalenvironment policies.

Identifying the sustainability issues and risks that matter most to yourstakeholders is vital in the heat of climate change, to determine theissues that bring the most value to your company, society and/or theenvironment.

Sustainability governance in Malaysia

The Malaysian Code of Corporate Governance (MCCG) 2012 nowrequires the Board to formalise ethical standards through a code ofconduct and to ensure that company strategies promote sustainability.The Board is also expected to formalise a Board charter.

Bursa Malaysia’s sustainability guide for directors guidelines waspublished to provide guidance for public listed companies inimplementing and reporting sustainability practices.


Multinational

Challenge: PwC was engaged to conduct a sustainability risk assessment for a leadingconglomerate involved in plantations, automotive, energy & utilities, industrial, propertydevelopment and healthcare industry sectors.

Solution: We identified and prioritised key sustainability risks at both group and divisionallevel, and were aided by a comparable analysis of sustainability risks faced by selected

How we can help

Drawing from our knowledge of recent developmentsglobally, our experience advising other organisations andour best practices, we'll help you to:

• Develop codes of conduct and policies and procedures that meetyour stakeholders' expectations, and ensure your organisation'svalues are respected and reinforced

• Win employee buy-in to your sustainability strategy with effectiveframeworks and approaches that outline risks and opportunities.This will help everyone understand and support your strategy, sothat you have clear and coherent communications and optimalemployee engagement

• Manage risk and regulatory compliance so you'll understand itsimpact on your company’s strategy and operations. We'll examine allsustainable development legal requirements, company policies, andindustry/voluntary codes to assess your compliance levels, andwhere you can improve.

Selected case studies in governance, risk & compliance


“Many companies have existingsustainability initiatives,comply with regulatoryrequirements, and providesupport during disasters.However, a large portion ofthese companies do not havedefined focus areas and havenot aligned the positive impactfrom their sustainability effortsto corporate strategy, brandand value creation, thus leadingto value leakage.”

______________________

Jack Cunningham – Associate Director,Sustainability & Climate Change, PwCMalaysia

Multinationalconglomerate

Sustainability riskassessment

level, and were aided by a comparable analysis of sustainability risks faced by selectedglobal companies.

Results: We were able to pinpoint key priority areas that were not given adequateattention by the company. The overall assessment enabled the company to developstrategies and mitigations that address key sustainability risks.

Leading Malaysiantelecommunicationscompany

Corporate responsibility(CR) strategy andgovernance framework

Challenge: Following a Board governance review, a leading Malaysiantelecommunications company sought to develop a CR strategy and governanceframework.

Solution: Our first step was to benchmark local and international companies to identifythe material focus areas for the telecommunications industry as well as local needs. Wethen engaged the Senior Management and Board Members to obtain their input on ourproposed CR framework, reporting improvement and roadmap. We also delivered anawareness session on sustainability and good reporting practices to the relevantpersonnel in the organisation.

Results: The final report consists of key findings and a roadmap which indicatesimmediate and long term recommendations that can be used by the client to produce asustainability pull-out section in their upcoming Annual Report.









Sustainable supply chain &operations


services

What are sustainable supplychains & operations?

• Ensuring that environmentaland social sustainability areembedded in all stages along

Globalisation has led to an increasingly complex web of supply chainsthat cross national borders. Understanding the impact of youroperations on the environment as well as the positive or negativeimpact on the communities in which you operate in can driveimprovements to corporate strategy, day to day operations andultimately financial performance.

Companies with sustainablesupply chains will look beyondshort-term financial gain andinstead seek to create long-termvalue for the organisation

embedded in all stages alongthe supply chain in theproduction of goods

ultimately financial performance.

Developing robust supply chains with conducive workingenvironments is a continuing challenge for many organisations. Thedemand for more transparent operations has created a greater needfor businesses to embed sustainability in all their sourcing decisionsand processes. Businesses are accountable not only for their ownsupply chain, but also for that of their suppliers and subcontractors.

While obvious improvements such as reducing waste and excesspackaging will be important, the true competitive advantage will comefrom innovative thinking about new products, processes, sourcingmodels and services. Securing sustainable sources of key raw materialswill also be critical to business continuity, cost and reputationmanagement.

What’s the business case?

Better management of risks Social license to operate Increased employee satisfaction Product innovation Reduced operational risks Reduced operational costs Enhanced efficiency Greater customer loyalty

0% 50% 100%

Automotive

Chemicals & Process Industry

Industrial Products

Pharmaceuticals & Life Sciences

Retail & Consumer Goods

Technology

Telecommunications

% of respondents indicating 'sustainability' as very important orimportant as a supply chain value driver

Source: PwC Global Supply Chain Survey 2013

Industries areincreasingly seeingthe importance ofembeddingsustainability intheir supply chains

How we can help

We'll put our experience to work by helping you:

• Assess the risks associated with your supply chain and the stepsnecessary to protect your brand

• Consider best practices from across a range of industry sectors

• Define the characteristics that you require from your suppliers inorder to make sure they are sustainable

• Monitor and manage environmental, social and governance risksassociated with your supply chain

• Measure the financial cost or potential impact of your carbon, waterand energy usage on the environment, and local communities

• Redesign global supply chains to be cost-efficient, minimising theirimpact on the environment and delivering products and serviceson time

Selected case studies in sustainable supply chain & operations


Malaysiantelecommunicationsoperator

Challenge: PwC was engaged to develop an approach to cascade environmentalcriteria into purchasing decisions across the organisation.

Solution: We worked with the client’s sustainability team to design and facilitate a cross-functional workshop to educate buyers from the client’s various divisions, includingMarketing, Finance, Facilities and Operations, on the benefits and scope of greenprocurement.


“When companies do notmanage sustainability in theirsupply chain, they miss out ona great opportunity to createa sustainability-enabled valuechain that focuses on revenue,creates productivity andbuilds resilience.”

____________________

Jack Cunningham – AssociateDirector, Sustainability & ClimateChange, PwC Malaysia

operator

Green purchasingcriteria

procurement.

Results: A clearer understanding of green procurement concepts enabled the team todevelop green criteria for their respective purchasing decisions.

European frozen foodcompany

Sustainable fish sourcing

Challenge: PwC was asked to review the client’s processes for sourcing fish- a key rawmaterial for them and one where prices were rising and fishing quotas were reducingsupplies.

Solution: We undertook a full analysis of every stage of the supply chain, includingmarket, value chain and competitive cost analysis.

Results: We proposed improvements that would not only save money for the clients, butmaintain the company’s competitive position, as well as its ethical and environmentalstandards.









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