REPORT: Local listed firms still lagging in CSR

KUALA LUMPUR: The CSR 2007 status report commissioned by Bursa Malaysia reveals that Malaysian private listed companies (PLCs) generally lag behind international best practices in corporate social responsibility (CSR) disclosure and approach.

Chief executive officer Datuk Yusli Mohamed Yusoff said the stock exchange operator was “not surprised” by the findings.

“We are at the beginning of this journey. We introduced our CSR framework in late 2006. We are still a developing nation and so would expect that our practices would most probably lag behind the best international practice.

“So, I think we need to take the results of the survey within that context,” he told a briefing after announcing the survey results yesterday.

Datuk Yusli Mohamed Yusoff holding a copy of the status report

Yusli said although the results confirmed that Malaysian companies still had some way to go, they also showed that about one third of the companies in the sample of 200 “came out reasonably good.''

“For the other two-thirds, we think there is a lot of room for improvement. We will try and do as much as we can in terms of raising the level of awareness and knowledge of CSR among our listed companies.”

According to the survey, high risk PLCs scored the best results. These included companies in industries that are more regulated because of the nature of their business and their inherent social and environmental impact such as tobacco, alcohol and gaming.

The survey also found poor CSR engagement by Malaysian PLCs and on average, the companies surveyed demonstrated a lack of knowledge and awareness of CSR.

The report said the two key areas that required more attention were environment and diversity.

The survey found that only 32.5% of PLCs was either in the above average, good, or leading categories for CSR practices.

At the other end of the spectrum, two-thirds of PLCs ranked either average (27.5%), below average (28.5%) or poor (11.5%). Only 4.5% were in the leading category, with 67% of them being multinational companies.

Adoption of CSR activities were measured based on the four dimensions defined in the Bursa Malaysia CSR framework - marketplace, workplace, environment and community.

Yusli said the CSR framework would serve as a guide for companies and the CSR survey, which Bursa intends to run on a yearly basis, would enable the stock exchange to monitor the progress of CSR practices of listed companies.

On the idea of a CSR index, Yusli said: “It's something that is (being) done in many developed markets. We would like to create our own CSR index over time, but for us to do so, we need to compile data so the survey is one of the steps we can take to compile a database of what our companies do in terms of CSR.”

He added that it would take one to two years to develop the index.

Bursa engaged CSR Asia to assist in analysing the survey results.