COMMENT | Connecting ESG to SDGs for sustainable development

COMMENT | Recently, I joined a webinar on the progress, challenges and way forward for realising SDGs in the Asean context.

I was particularly drawn to the question ‘‘What if sustainable development goals (SDG) targets come into conflict with environmental, social and governance (ESG) compliance?’’

Victor Karunan, the key speaker, admitted that this is one of the challenges faced by many countries in promoting sustainable development.

One way is to find out how these two assessments can complement each other.

Adopted by the United Nations in 2015, the SDGs are a set of 17 interconnected goals designed to promote peace, prosperity and environmental sustainability.

These goals cover a broad range of issues including poverty eradication, gender equality, clean water, climate action, quality education and many more.

Meanwhile, ESG are a set of criteria used to evaluate a company or organisation’s performance in three areas, namely environmental, social and governance.

Corporations that score well in these areas often have strong ethical and sustainability practices.

As chair of Asean Summit in 2025, Malaysia joins other Southeast Asian nations in reaffirming their commitments to support and implement the 2030 Agenda for Sustainable Development and its 17 SDGs.

The widespread adoption of ESG principles by governments and businesses also reflects a shift towards achieving the Malaysia Madani vision and fostering a stable and conducive environment for sustainable development.

Yet, too many cooks could spoil the broth. Choice overload on sustainable development performance indicators makes review of indicators a paramount task.

Narrowing down to the most relevant indicators can help us focus on metrics that truly reflect impact and performance in key areas.

Malaysia’s report card on SDGs

Based on the Sustainable Development Report 2024, Malaysia ranks 79 out of 166 assessed countries of the report with a total score of 69.3 percent.

The scores can be understood as performance percentages of the SDGs. A score of 100 indicates that all SDGs have been achieved.

Out of the 17 SDGs, Malaysia only achieved a desirable SDG level for two goals; that is "Goal 1: No Poverty" and "Goal 11: Sustainable Cities and Communities".

Areas that experience stagnation include clean energy, infrastructure, climate action, quality education, inequalities and a few others.

But fear not, Malaysia is on track to achieve the SDG targets through localisation of the SDGs, decentralisation and community-driven efforts.

Decentralisation will help engage local governments and communities in achieving and sustaining Malaysia’s reform agenda.

For instance, strengthening local governance via periodic evaluations of planning and budgeting processes. This will help identify gaps and areas for improvement.

Similarly, workshops or training sessions can be held with city councils across Malaysia to see how they could integrate the SDGs at the subnational level.

In addition, public campaigns in the form of forums or community events are important to educate local communities about the SDGs and how they can contribute.

This is aligned with the UN principle to leave no one behind and to leave no place behind.

Aligning ESG and SDGs

While the SDGs present a global effort toward sustainable development, there are several intersections between ESG and the SDGs.

For instance, the environmental factors in ESG, such as water resources management and reducing carbon footprints, align with "SDG 6: Clean Water and Sanitation" and "SDG 13: Climate Action".

Doing your part in reducing the usage of single-use plastic bags, plastic bottles and takeaway food containers will contribute to "SDG 15: Life on Land" and "SDG 14: Life Below Water".

This requires a concerted effort from governments, industry players in the plastic value chain and individuals.

Likewise, the social factors in ESG, including gender equality and labour practices, directly support goals like "SDG 5: Gender Equality" and "SDG 8: Decent Work and Economic Growth"’.

Also, having a safe and conducive workplace will drive "SDG 3: Good Health and Well-being".

On the other hand, the governance factors in ESG, such as anti-corruption, transparency and reporting are in sync with "SDG 16: Peace, Justice and Strong Institutions".

Corporations can integrate SDG-related targets by embedding ESG considerations into their operational and strategic decisions.

This not only demonstrates a commitment to sustainable growth but also contributes to global SDG efforts.

CHONG YEN MEE is a climate change analyst by training and enjoys writing doomsday stories that make people act.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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