Investing for A Sustainable Future - MDEC Takes ESG Leadership for the Digital Economy

2022 was significant for MDEC as we started our environmental, social and governance (ESG) journey. It was a highly productive year, thanks to the amazing support from both our internal and external stakeholders.
 
ESG policy
An important first step was setting out our ESG Policy to give the context for implementing ESG principles and practices in MDEC. This would strengthen MDEC’s sustainability credentials and enhance our overall value proposition, enabling MDEC to lead by example and drive adoption across the ecosystem.
 
Receiving the endorsement of our ESG Policy by the MDEC Board of Directors was an important milestone, demonstrating a positive “tone at the top” to move the dial on ESG adoption.

Stakeholder Engagement and Materiality Assessment Study
The most complex project in 2022 involved undertaking the 3-month independent Stakeholder Engagement and Materiality Assessment (MA) study. Critical to its success was the active participation of key stakeholders, especially in the various consultation exercises.

The study has enabled MDEC to do a comprehensive analysis of the ESG issues most relevant to the organisation, and the digital economy ecosystem, according to key stakeholders, and to refine them into prioritised focus areas. It has also given MDEC valuable insights into designing the organisation’s ESG roadmap, targets and reporting.

Diversity & inclusion 
MDEC signed the UN Women's Empowerment Principles, taking a further step in our long-term commitment to promoting diversity and inclusion, including the full development of female talent, in the workplace. As a result, significant strides have already been taken in terms of gender equality in MDEC, where women make up 58% of total employees and 50% of management.

Malaysia Digital
Through the introduction of Malaysia Digital (MD), MD-status companies are highly encouraged to align their operations to the government’s ESG goals. MDEC is collecting ESG-related data from MD-status companies via the half-yearly MD Industry Survey. This is spurring ESG awareness among these companies while providing MDEC with a baseline understanding of their progress against sustainability indicators. 
 
The latest MD Industry Survey showed that 53% of MD-status companies are committed to ESG, with a further 19% likely to commit within two years. In addition, respondents have made significant strides in gender equality, with women making up 48% of employees. Businesses are also embracing the development of ESG-friendly products and services. These account for 83% of expenditure on R&D and 64% of local (rising to 84% of export) sales.

Malaysia Digital Climate Action Pledge (MDCAP)
MDEC developed MDCAP, in partnership with the UN Global Compact Network Malaysia & Brunei, to inspire digital businesses, especially SMEs, to take practical steps to reduce their carbon footprint. Following the announcement at MDW2022, over 50 companies have become signatories, 70% of whom are SMEs. By far, the most popular pledge is to conduct business operations in an environmentally responsible manner, subscribed to by over 70% of companies.
 
Nearly 40% of signatories are implementing climate-related goals, with 20% participating in the Race to Zero or Science-Based Target initiatives or other campaigns. Over 30% measure their business’ carbon footprint. Over 60% are embarking on decarbonisation activities within their operations, with a similar percentage within their supply chain. Over 50% are interested in becoming industry champions to help advocate for climate action.
 
Commenting on MDEC’s sustainability efforts, Ts. Mahadhir Aziz, CEO of MDEC said the lead agency in digital economy is striving to be at the forefront of ESG and sustainability.
 
“2022 was a momentous year for MDEC as we embarked on this crucial journey. I’m delighted that we have established such a solid foundation on which we can build, thanks to the strong support from our key stakeholders,” he said.
 
He added that the most significant contribution MDEC can make is by raising awareness and understanding of sustainability issues across the digital economy and helping companies to take that important first step to commit to ESG.