In recent years the topic of environmental, social and governance (“ESG”) has been trending. The COVID-19 pandemic further accelerated ESG, especially in the light of issues surrounding forced labour and modern slavery. Organisations are now not only subject to scrutiny from regulators, but also other stakeholders such as investors, activists and society at large. Given the increased interest from stakeholders, there are calls for organisations to consider ESG in its business undertakings.
In this article, our Partner Muhammad Zukhairi bin Muhammed Salehudin of the Corporate Finance and Securities practice group of Zaid Ibrahim & Co. (a member of ZICO Law) provides an overview on the duty of Malaysian directors to consider ESG in the decision making process, focusing on duties under the Companies Act 2016.