Representing the Malaysian downstream timber industry as it does, the Malaysian Wood Moulding and Joinery Council (MWMJC) actively encourages its members to raise their awareness of environmental, social, and governance (ESG) regulations and issues, as well as to take on the necessary initiatives to implement ESG guidelines in their businesses. Many MWMJC member companies have already started their ESG-related activities, with more preparing to follow suit. These companies are fulfilling their obligations and responsibilities as good corporate citizens. They are also seeking to reap the benefits of being ESG-ready, by providing ESG-compliant goods and services to customers across the world that demand them.
Globally, sustainable timber has become an issue of some significance. The World Economic Forum has outlined several reasons why sustainable timber “… must become a core global building material”. Amongst these reasons include the fact that timber building materials are major carbon sequestering and storage sinks; the cost-effectiveness of timber; and timber buildings provide better living and working environments. The Collaborative Partnership on Forests notes that sustainable forest management has a significant impact in terms of “… enhancing livelihoods, contributing to landscapes and cities and reducing the world’s carbon and material footprints.”
On a regional level, sustainable timber is important as well. For example, in Malaysia, the Malaysian Timber Council notes that sustainable forest management has been in practice since 1901, well before the nation was established, and “… forest certification in compliance with forest sustainability in Malaysia began as early as 1994”. The ASEAN Post pointed out that “More than 50% of Malaysia’s landmass is still blanketed by forests” as a result of “… the far-sighted vision of the country’s leadership towards sustainable development.” The Malaysian Timber Certification Scheme (MTCS), which is overseen by the Malaysian Timber Certification Council (MTCC), is the first tropical timber certification in the Asia Pacific region endorsed by the Programme for the Endorsement of Forest Certification (PEFC).
To this end, MWMJC prioritises the sustainability of Malaysia’s timber-related industries, undertaking initiatives to mainstream ESG guidelines, while enhancing member awareness of ESG considerations. Its members have likewise responded positively, with many onboarding ESG principles within their companies. MWMJC Chairman George Yap, who is also Managing Director of Weng Meng Industries Sdn. Bhd. (Weng Meng), exemplifies ESG leadership in this regard.
“My company’s vision is to be a role model of sustainable business in Malaysia, and sustainability involves business continuity that is related to profitability, proper succession planning, and market relevance. Hence, we are highly motivated to learn and use ESG best practices to achieve these goals,” he explains. “By having ESG guidelines in our business growth strategy, we can ensure business continuity, profitability, and efficiency; to be a sustainable profit-making company that can take care of all stakeholders.”
While most of these ESG-aware companies significantly weigh the environmental pillar, some MWMJC member companies have leapfrogged their industry fellows and competitors by embracing ESG initiatives holistically. For instance, Celeste Kam, Director of Business Development from Ever Prime Timber Industry Products Sdn. Bhd. (Ever Prime), prioritises the social pillar of ESG over the environmental. “Customers have extended their requirements for more than just certified timber products,” she says, explaining their focus on social responsibility.
Hence, Ever Prime has tightened employee welfare policies, ensuring that no child labour is employed while encouraging female employment and focusing on local employment within the communities it serves. It also engages the local communities, frequently speaking with the MPs and village leaders to understand the social impact of its operations. Ever Prime also practises strict meritocracy in terms of its remuneration and benefits structure; not discriminating on the basis of race, sex, religion, or nationality. Ever Prime further pays attention to the environmental aspects of its business beyond seeking sustainable certification of its timber supply, such as switching to LED lighting and transforming its administrative workflows to more paperless processes, thus reducing the need to print documents.
Meanwhile, Diverse Integrated Sdn. Bhd. (DI) weighs all ESG pillars equally. DI’s Vice President Chong Yu Khang noted that DI has also sought imminent implementation of Forest Stewardship Council (FSC) and PEFC certification, while having also invested in solar photovoltaic renewable energy systems since 2022. “DI participants have attended various UN-organised workshops to upskill as well as understanding the company’s current ESG scores, and how to improve them by aligning to the relevant ESG standards” he added. While not currently mandated locally, almost 95% of DI’s business is directed towards Northern America, Australia, and Europe; aside from its responsibility and duty as an entrepreneur, the company’s board also believes it is better to engage in ESG readiness in advance, especially in preparation for its IPO.
Weng Meng also considers all the pillars of importance, although its focus is on the environment, as it relates to its cost efficiency in terms of reducing waste and energy consumption. In addition, Weng Ment uses wood alternatives such as oil palm trunks to create its products, as part of its drive towards net zero. Beyond FSC and PEFC certification as well as using solar energy and LED lighting, the company provides free transportation to workers who stay near its factories, free meals to all staff, compliant hostel provision, and conducts periodic audits to ensure it remains compliant and up-to-date with ILO requirements.
Various parties potentially benefit from these initiatives, not least the companies in question themselves. “We have gained support from our customers, especially those who have evaluate ESG in term of business. We have received support from government agencies and institutions in our R&D. We have reduced our waste output and energy consumption, which improves our bottom line. We have received recognitions in form of awards, which is useful for corporate and product branding. And our staff retention has improved,” Yap says, enumerating the ways in which Weng Meng’s ESG initiatives have brought tangible benefits to the company.
MTCS-certified Tong Sim Wood Industries Sdn. Bhd. (TSW) has also wholeheartedly embraced ESG practices despite not having experienced any benefits or gains as yet. Edmund Lim, the company’s Managing Director, noted that eventually, the company hopes that its efforts will provide confidence to TSW’s customers, enhance the company’s long-term performance, mitigate risks, attract investors, and align the company with changing societal expectations. “We are committed to only sourcing timber materials from sustainable forests certified by PEFC, FSC, or the European standard FLEGT. Stakeholders also will be able to participate in our procurement processes, supplier management, and marketing strategies.”
Sustainable timber is an integral component of sustainable construction, and companies in the building and construction industry can take full advantage of products from ESG-ready timber companies in a variety of business opportunities opened up by the focus on ESG, especially in sustainable construction. This includes the construction of green buildings and smart cities, amongst others.
For more information on MWMJC’s ESG-ready companies and how their products can benefit construction industry players, visit its website at https://www.mwmjc.my/ or call the Secretariat at +603-9283 7893.
