This article first appeared in The Edge Malaysia Weekly on March 20, 2023 - March 26, 2023

GHL Systems Bhd, a payment service provider, was added to the FTSE4Good Bursa Malaysia Index (F4GBM) for the first time in December 2022. This milestone is considered the fruit of the company’s labour after it invested significant resources to expand its environmental, social and governance (ESG) initiatives in 2021.

In that year, the company launched its sustainability framework, set the goal of being carbon neutral by 2050 and published its labour and human rights policy. It was also accepted as one of the 54 members of the CEO Action Network (CAN), which is a network of business leaders committed to acting on sustainability.

ESG caught up with Chong Kok Wai, the group head for legal compliance and sustainability, who has been leading these efforts in the company. The interview has been edited for brevity.

ESG: How did you get into this role, given your background in law?

Chong: All the while, I’ve been doing compliance. When I joined GHL in 2021, the new Malaysian Code of Corporate Governance (MCCG) [was introduced]. I was supposed to present a gap analysis on MCCG 2021 and MCCG 2017. That’s where I saw a lot of sustainability issues [in MCCG 2021]. I started the presentation by saying there are 48 references to sustainability in the MCCG 2021.

After that, the board said, “Why don’t you help us do sustainability?” A lot of people think of sustainability as a compliance issue because the regulator wants you to do it. But I’ve always had a passion for sustainability, so I took up the challenge.

As a compliance professional, I approach it from the standpoint of governance, with the environment and social concerns at the forefront. If you take care of the people, they will work hard for you. If you’re appreciative of natural resources, you will take care of the environment. Human beings need rules and regulations to govern them. When these are all in place, you will have profits. I wanted to show that this can be done by anyone.

How did you start?

The most important thing is how you approach [the task] based on the industry and company structure. What does the company do? Which part of the company is the dirtiest? That’s where you start to clean up.

You need a gap analysis report. I hired a consultant to do it across the ESG-related areas, [taking into consideration] the FTSE benchmark. That’s how I can see where we are lacking.

Some of the departments were already doing [ESG-related things] but they didn’t know they were doing it. So, communication and engagement with internal stakeholders and materiality assessment are important. When you talk to each department, you will eventually find out what data you need. Policies and implementation come in after that.

What is GHL doing to decarbonise?

One of the most pressing concerns is with the data centre. Immediately, we thought of how we could make data centres more environment-friendly and save money. My directors and group CEO were very supportive. We decided to go for renewable energy through solar panels.

We have also commenced the transition of our workload [from on-premises data centres] to cloud-based solutions (that are more energy-efficient and saved 1.6 tonnes of carbon emissions, according to its 2021 sustainability report).

Have you seen savings?

Yes. If I’m not mistaken, the amount saved [in electricity bills] is about 20% to 30% per month. Seventy per cent of our electricity now comes from solar (which saved 4.6 tonnes of carbon emissions based on the 2021 sustainability report). We go through the government’s Net Energy Metering scheme to sell the renewable energy generated by solar panels back to the grid.

But not many businesses have their own building and can pursue this kind of [project]. It’s always about the business case. If there is a business case, there will be buy-in. This is a challenge for all sustainability officers.

How do you feel about being included in F4GBM?

I didn’t expect it. I joined the company in 2021. Considering the fact that I had to take care of my main turf, which is legal and regulatory compliance plus sustainability, a lot of people asked me how we managed to do it. Engagement with FTSE is important because I get to know what they require.

But I don’t care so much about what these [awards] or certifications mean. It only validates that what you’re doing is right. You should actually focus on what you should do and learn at the same time.

Does being on F4GBM give you any benefits?

I will say that the most important thing is that we are an Asean-based company, so this matters when it comes to investors. Some of our investors, especially if they are from Europe, will ask whether we are on F4GBM. So, at least we know we are on the right track.

We set our 2050 goal in accordance with the 12th Malaysia Plan … We have a road map [to achieve the goal] … We will reveal [the plans] from time to time. We want to let our hard work do the speaking. It’s not easy. It’s a lot of hard work from the team. We have a [sustainability] committee. Apart from myself, we have our group head of human resources, CEO, group chief financial officer and investor relations [officer] to do this.

The inclusion in CAN got this going even more. We got to meet a lot of like-minded people at CAN, who have been doing sustainability for a long time, and learn from them. It makes the journey easier. Otherwise, you’re all alone.

How do you plan to reach carbon neutrality? Can that be done purely by reducing emissions?

I don’t think so. We need more than that. Reforestation is one of the things that we did with Econinja, which is a company recommended by our consultant. We participated in their tree-planting programme [in Johor] because they have a good tracking system where we can track the growth of trees through QR codes.

We are going to work with Econinja on another project on biodiversity that involves coral planting. I think sustainability has to be fun as well, so people will join in. I believe that the awareness is more important than doing the thing itself. It’s not the immediate results that you see but rather the awareness that you create for the employees, suppliers and partners.

Do you use the carbon credits generated from these projects to offset your baseline?

Yes. This will be our first time doing it. But it won’t be much because the trees are still in the infancy stage … That’s why we don’t equate [these activities as the main strategy to reach] net zero. But environmental [initiatives] take time. We are not a high carbon emitter, and that’s something we have to stress.

Cybersecurity and data privacy are material matters for technology companies. What are some things that you are doing on this front?

We have a policy that if there’s a [data breach], we are very transparent about it. We’re not required to. But we need to, as a matter of corporate social responsibility. In 2021, [there was a breach] and our CEO announced it, even though it didn’t do that much damage to our main system. It was a separate system but we still announced it.

Personal data protection is so important now, so we need to make sure that we beef up our cybersecurity. Right now, we are subject to a lot of cybersecurity and cyber resilience audits on a yearly basis by Bank Negara Malaysia and Payments Network Malaysia Sdn Bhd. We also get certified by the Payment Card Industry Data Security Standard, which is the gold standard.

What do you hope to achieve and see from stakeholders?

Being in the F4GBM Index is relevant in that it’s easier to talk to people and get them onboard. We have big merchants and partners, some of whom are overseas. This gives them a sense of comfort. To me, our future plans include doing this not just for us but also for our suppliers and merchants.

[It would be good] to have engagement with the government to [provide] more incentives. I know they’re on the right track. But we must go down to the micro-, small-, and medium-sized enterprises if we want it to be a collective effort, and try not to use the “cane” to [force others] to comply.

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