Cover story: How Andrew Chan became a pioneer in corporate sustainability practice

Chan was born and raised in the UK. As a youngster living in the countryside in northern England, he’d walk through the park to school every day and go camping with his Cub Scout pack. He reflects that times have changed. Kids these days don’t have such a privilege, with parents more concerned over their safety.

A background in engineering, economics and management led the Oxford graduate to a sterling corporate career in management consulting. When he joined PwC in 2004, sustainability, he says, wasn’t “a job people were aware of 20, 30 years ago, unless you were in environmental sciences or something like that.” But as fate would have it, the opportunity came when a client engaged PwC to create a measurement framework for their community engagement programme in East Malaysia. 

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“At the time, none of our peers were doing sustainability work, and we weren’t sure if this would actually take off in Malaysia, but we thought, this is very relevant to our firm’s purpose and the nation’s direction. We’re a growing economy, we’ve got very rich biodiversity, we use a lot of foreign labour,” Chan says. “There are a myriad issues around sustainability that are relevant in terms of companies delivering on their purpose and good governance; how do we run companies as part of a rapidly growing region in the global landscape?”

Thus begun a new chapter in PwC Malaysia when Chan founded its regional sustainability practice in 2005 and became a key figure in developing the corporate sustainability agenda across the region. “We were one of the early movers into the space,” he says, explaining that a major goal was to embed sustainable practices into corporate strategies and operations. “What matters to us is working with clients who have a genuine desire to impact change. That’s been our core philosophy for the last 18 years we’ve been doing this.”

The Malaysian government has allocated funds and is ramping up action on its long-term pledges to meet its sustainable development goals and bring the country forward in the global market. With an increasing number of “greening” opportunities in some of the country’s innovation clusters, such as energy, IT outsourcing, electronics manufacturing and the digital economy, Malaysia is in a position to achieve its goal of being a decarbonisation leader in the region. 

However, the country’s reliance on fossil fuels and other traditional carbon-intensive industries such as agriculture, and oil and gas influence its decarbonisation commitments. “It’s the industry mix we have in Malaysia,” explains Chan. “We’ve got a lot of commodities that are driving up the economy, but with the pivot to a lower carbon model, we need to think about how we can open up more opportunities in new areas.”

For example, what do we do with the forest resources we’ve got? “The answer is not just to chop down trees. That’s the old form of monetisation. We have things like carbon markets (trading systems in which carbon credits are sold and bought) now. There are state governments we’ve been talking to who are looking at replacing the revenue they’re getting from mining or forestry (industries which extract natural resources), to protecting those resources and monetising them through carbon markets.

“Companies that are generating emissions can buy carbon credits to offset their emissions. By investing in forests and planting the right mix of trees, you create a carbon offset that absorbs those emissions. This is part of the solution when we talk about moving towards a net zero economy, along with decarbonisation and growth of lower carbon businesses.”

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Chan also wants to champion Malaysia’s rich biodiversity. The Heart of Borneo, which is one of the largest transboundary rainforests remaining in the world, is found in Sabah, Sarawak, Brunei and Kalimantan. Imagine the opportunities for ecotourism and the discovery of new biopharmaceuticals that can cure diseases like cancer, right in our back garden.

Chan says, “Do we have to chop down trees? Do we have to displace indigenous communities from their own homes when we can generate different types of income streams? We’ve been fortunate with the [abundance] that we have, but how do we use that to accelerate our transition to more sustainable industries? Malaysia is a trading nation, so this is also about maintaining economic competitiveness. If we don’t get our businesses to transition and pivot to new economic sectors, we might lose out to other countries in Southeast Asia. When buyers and investors are looking for more sustainable companies and if we don’t have enough of them here, they will go to [our neighbours] and we’ll lose that competitiveness; we’ll be in trouble.”

The road to sustainability—both ecological and financial—is not easily cut and dried, however, as the area is incredibly complex and nuanced. What matters is finding the right focus.

“Not every company has to excel in every single pillar,” Chan says. “If you’re using a high degree of foreign labourers, you will likely need to be much better at how you deal with workforce management. If you’re a technology company and don’t have a big workforce, maybe your focus should be more around energy, cyber security and data centres. There should be a minimum bar for the foundational areas, but what the company should be doing is responding appropriately to issues that are most relevant to its business and key stakeholders. This is what we call materiality, which means in the world of sustainability, are you focusing on the right issues?”

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Chan says there needs to be education, support and clear policies in place for Malaysians to excel in this space. “It’s great that we’ve encouraging electric vehicles but as an industry, what is our position versus Indonesia, Thailand and Vietnam for instance? Where do we want to play in this space? For example, are we going to excel in battery reconditioning? Are we going to excel in deploying the infrastructure for charging? We can’t be trendsetters because Indonesia and Thailand have already attracted significant investment, but with clear guidance, defining the areas entrepreneurs can play in, and providing the right incentives, we can make inroads,” he says.

“Are we also supporting the development of this space with the right education, like TVET T-vet (technical vocational educational training) skills so that we can get the right talent to nurture these new growth sectors? A clear policy landscape supported by the right sort of incentives will do a lot in terms of allowing market forces to come into play. And when you back it up with an education system, it all becomes quite cohesive.”

To read the full story, grab a copy of the April 2023 issue from newsstands or click here for the digital copy.

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