This article first appeared in The Edge Malaysia Weekly on November 27, 2023 - December 3, 2023

In essence, our ESG commitment not only seeks financial returns but also strives for a sustainable, equitable and transparent future.” - Johari

Hektar Real Estate Investment Trust emerged as the gold winner in both the REIT sector and outstanding ESG and dividend return categories of The Edge Malaysia ESG Awards 2023, thanks to its efforts to reduce its carbon footprint through energy initiatives, which allowed the company to reap both environmental and cost benefits.

“At Hektar REIT, accomplishing ESG values are central to our ethos. Environmentally, we invest in technologies to reduce our ecological impact by reducing our carbon footprint and greenhouse gas emissions. Socially, we champion the well-being of our employees and the communities we serve, emphasising ethical practices and positive engagement,” says CEO and executive director ­Johari Shukri Jamil.

“From a governance standpoint, we prioritise transparency, integrity and accountability, ensuring ethical operations that benefit all stakeholders. In essence, our ESG commitment not only seeks financial returns but also strives for a sustainable, equitable and transparent future.”

Hektar REIT initially faced various challenges as it transitioned its operations, secured stakeholder buy-in, quantified the impact of ESG initiatives and adapted to the fluid regulatory landscape.

“To surmount these challenges, education became pivotal. We ran in-house training and campaigns to elucidate the long-term benefits of being ESG-compliant, showing stakeholders that there were tangible financial and reputational gains beyond ethical imperatives,” says Johari.

“We continued to refine our ESG deliverables to ensure clarity and transparency, which helped achieve the necessary milestones. We also improved our overall strategies by ensuring regulatory compliance by undertaking the prescribed milestones before they become mandatory, so that there is room for improvement.”

Subang Parade is one of Hektar REIT’s core assets - Photo by Subang Parade

Hektar REIT partnered with UEM Edgenta to conduct a detailed energy audit at its malls, where several energy-saving measures were implemented.

Additionally, since 2017, Hektar REIT has engaged with local communities in the areas in which it operates and emphasised initiatives tailored to local needs, says Johari.

“On the reporting front, we are transparent and use detailed analytics to provide stakeholders with real-time data. Instead of mere compliance, we try our best to be above and beyond the minimum regulatory requirements. Moreover, our holistic stakeholder engagement, encompassing investors, tenants, suppliers and communities, ensures a comprehensive feedback loop,” he says.

To make adoption of ESG easier in the coming year, Hektar REIT urges stakeholders to unite under clear governmental guidelines, amplified by fiscal incentives. Bursa Malaysia’s Centralised Sustainability Intelligence platform and Capital Markets Malaysia’s Simplified ESG Disclosure Guide will bolster ESG adoption for public limited companies and small and medium enterprises, says Johari.

“It is important for companies to play a critical role in reducing their negative externalities, especially regarding emissions, to combat the climate change issues and to align with the government’s goals to be carbon neutral and net zero. Essentially, ESG is not just about ethical operations. It is a holistic approach that ensures sustainable growth for businesses, fosters community development and ensures environmental conservation.”

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