Invariably, the success of any sustainability roadmap within a company is catalysed by the collaborative efforts between the organisation and its stakeholders. This was the realisation made at Tenaga Nasional Bhd (TNB), which saw the organisation taking additional progress to showcase its commitment to sustainability through specific initiatives, such as engaging local communities in environmental projects and forming partnerships with industry leaders to advance their sustainability goals.

These efforts extend beyond regulatory compliance to foster transparent and inclusive dialogue, driven by the voices of the community. The central force behind TNB’s sustainability journey is its aspiration to achieve net zero emissions by 2050, which is underpinned by its energy transition strategy that integrates sustainability and environmental, social and governance (ESG) principles into every aspect of its operations.

Over the past year, TNB has strengthened its sustainability governance, laying a solid foundation for future initiatives. The company has introduced comprehensive policies, including environmental and labour rights policies, which demonstrate its commitment to reducing environmental impact and ensuring creative participation with all stakeholders. These efforts highlight TNB’s dedication to making sustainability a core part of its operations as it moves forward with its energy transition.

A key part of TNB’s sustainability framework is the protection of labour rights within the organisation. By upholding these rights and offering extensive upskilling programmes, TNB ensures that its workforce is continually motivated right through the transition, which often requires new skill set, safe working conditions, and additional support measures. This approach does not only protect employees but also aligns with global standards, reinforcing TNB’s commitment to ethical practices.

TNB’s sustainability efforts go beyond internal policies. The company actively promotes environmental awareness and best practices among employees, contractors and suppliers. By adhering to relevant laws and international standards, like those set by the International Labour Organization (ILO) and the United Nations Global Compact (UNGC), TNB ensures its practices are both legally compliant and aligned with its values as a socially responsible organisation, positioning it as a leader in driving positive change in the energy sector.

Since the beginning of 2024, TNB has been making concerted efforts to increase its sustainability and ESG footprint.

From an environmental perspective, TNB has instituted a policy to reduce emissions to align with its Energy Transition Plan. This policy promotes environmental awareness and best practices among employees, contractors and suppliers. It also commits TNB to transparent and timely reporting on environmental performance for accountability and clarity in sustainability efforts.

It includes adopting climate change mitigation and adaptation measures to safeguard the environment, optimising the utilisation of natural resources through effective conservation and preservation of water and biodiversity management, and protecting the ecosystem through an effective circular economy and proactive prevention of waste and pollution.

Nonetheless, the responsibility for upholding this policy does not rest solely with TNB; it also lies with its employees and stakeholders, who are expected to adhere to it strictly at all times. Some of the policy’s standards involve raising environmental awareness among internal and external stakeholders, such as contractors and suppliers, to encourage the adoption of sustainable environmental practices through transparent communication, active engagement and collaboration.

On governance, TNB has introduced an enterprise-wide framework to reinforce ethical business practices and a forward-looking culture. Through its thought leadership in sustainability and the enhancement of internal structures and processes, TNB has reinforced its governance adoption and practices.

Chairman Datuk Seri Abdul Razak Abdul Majid says TNB will continue to support the country’s transition towards a more sustainable and resilient energy future by continuously improving its governance structures with a focus on ESG principles.

“In bolstering governance, especially in the ESG context, a notable initiative undertaken by TNB is the formation of the Board Sustainability and Risk Committee (BSRC), which took effect on Aug 25, 2023. Our board of directors continues to demonstrate its commitment towards our sustainability agenda by expanding the oversight scope of the TNB Board Risk Committee to include sustainability,” he says.

In 2023, sustainability-linked key performance indicators were further enhanced and embedded within the board and senior management’s performance evaluation scorecard to drive group-wide accountability in steering TNB’s sustainability performance. Abdul Razak says sustainability performance objectives relating to the ESG pillars are tied to the president/CEO and top management’s indicators.

“TNB is constantly committed to managing and reporting on ESG matters, improving the assessments of the rating agencies as guidance for its sustainability strategy and operation, and devising specific action plans with the involvement of the various divisions and business units.”

TNB is committed to transparency and sustainability and has published its Sustainability Report 2023 on its official website. This report showcases TNB’s dedication to sustainability principles, highlighting its efforts and progress towards a greener and more responsible future.

Over the past year, TNB has made strategic investments in renewable energy (RE) to address the energy trilemma. The energy provider is also actively seeking to incorporate innovative technologies into the market to further its sustainability journey, including exploring the potential of carbon capture and storage (CCS).

As part of the National Energy Transition Roadmap (NETR), TNB is leading three flagship projects focused on large-scale RE and cleantech initiatives: (i) the Centralised Large-Scale Solar Parks; (ii) Hybrid Hydro-Floating Solar; and (iii) Hydrogen and Ammonia Co-firing. These initiatives have the capacity to deliver 3,000MW of RE capacity in Malaysia by 2040, and to date, TNB has successfully secured about 4.4GW of RE capacity across domestic and international markets in pursuit of the Net Zero 2050 Aspiration.

In another significant achievement, TNB has also surpassed its benchmarks by strategically implementing initiatives this year that resonate with its core values.

Leo Pui Yong, TNB’s chief sustainability officer, says the digitalisation of at least 160 ESG indicators, including metrics on carbon emissions, energy efficiency, water usage and labour practices, shows its steady dedication to transparency. These indicators are benchmarked against international standards such as the Global Reporting Initiative (GRI) and the United Nations Sustainable Development Goals (SDGs), ensuring accountability and continuous improvement.

“This bold move has not only improved our ESG ratings but has also set a new standard in the industry for openness and accountability. We take immense pride in the strides we’ve made, which are a direct result of the meticulous execution of our strategies,” she says.

“Our decarbonisation efforts have resonated well within the investor community, signalling a shift in the investment landscape towards more sustainable practices. The positive reception we’ve received is a clear indicator of the growing confidence in our ESG commitments. We are confident that this will continue to attract investors who are as serious about sustainability as we are,” she says.

“As we look to the future, TNB stands firm in its resolve to lead the energy sector’s transformation. Our actions today are shaping the energy landscape of tomorrow, ensuring that sustainability remains at the heart of all we do.”

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