Muhammad Naqib Bin Muhammad Nazim (22009942)

Question 1

a. The company can align its business strategy with the global shift towards cleaner
energy sources and the transition to a low-carbon economy. Discuss.

In this era, companies around the globe are facing with a pivotal choice due to increasing public concern
regarding environment and the negative effect of climate change. They are leave with two options which
are to be dependent on fossil fuels or embracing change towards cleaner energy sources and a low-carbon
economy. This essay should entail the positive impact of a company shifting its business strategy towards
cleaner energy.

As we all know, majority of countries have pledged their commitment to reduce its greenhouse gas
emissions by up to 45% by 2030 following the Paris Agreement. This leads to a booming market to the
new industry which creates a market opportunity for a new business to grow. It is not exaggerating to say
that this changes are not merely a trend but it is an irreversible transformation; hence, it creates a market
that is able to sustain in the long run. Not only it helps the environment, but in terms of social could also
be beneficial as it creates jobs and stimulate the economy. As a country policy is inclined towards green
energy, products from solar energy, hydroelectric energy and so on, the company should be able to find
its customer especially when the law enforcement are pushing the agenda forward; pushing industrial
activities to purchase their products.

Apart from that, compliance to the ESG practice could also boost the company brand and reputation. In
this era, more clients or consumers are prioritizing the companies background; scrutinizing the ethical and
environmental effort of the business. Due to that, a company that comply to the ESG will usually attract
vast spectrum of clients ranging from eco-conscious consumers to an extent building a good reputation
and trust with the stakeholders. For an example, World Economic Forum has stated that a survey
conducted found that 83% of consumers are taking into consideration buying from a company that
operates sustainably before buying a product.

Cleaner energy sources such as wind turbine, and solar power can also be beneficial to the company in a
way that the company do not have to spend monthly on buying fossil-fuel or coal. As the world moving
forward, there are more options for the consumer to buy clean energy sources which makes it cheaper to
get. This will save the company a huge amount of money. For an example, if the company is using 50%
energy from the clean energy and the other 50% from fossil-fuel, technically speaking, the company is
already saving up around 50% of its monthly capital.

In conclusion, it can be said that when a company is committed to shift its business strategy to clean
energy, not only it benefits the company, but the community as well. Other than it shows good
governance in the company, it also complies to ESG effort where the company will be listed as the first
choice to do business with as it takes care of the environment and social.
 b. Explain how one can work with suppliers to align their practices with ESG criteria
and encourage sustainable business practices.

ESG is relating to a framework used to determine the ethical and sustainability impact of a company
towards the environment, social and governance. At this age, it is more important than ever for a company
to comply to ESG in order to be noticed by the global clients, especially in the west. This is because a
company that commits to ESG effort is perceived as a company that is not being ‘selfish’ as it takes care
humanity as a whole. This essay should elaborate on how to work with suppliers to align their practices
with ESG criteria and encourage sustainable business practices.

For a start, in order to make sure that suppliers aligning to ESG and sustainable business, there should be
a policy change whereby a company that complies to ESG should be awarded with certifications and
standards. For an example, at Top Glove, they are committed to be awarded with ISO 14001 certification
to prove a point that they are a business that operates in a way to save the humanity as a whole. This
certification provides detail on the requirements for an organization to magnify its environmental
performance as it detailed a valuable insight for the environment, the organization and stakeholders. A
company that has this certificate will usually have a significant edge as the consumers or clients are prone
to choose them as a seller since these companies are usually on top of the list since more buyers are
actually looking for a company that complies to ESG. This shows that the business is able to sustain in the
long run.

Other than that, the companies and its employees should also be provided with training to empowers
them to align with ESG as it could be an investment for the future to the company itself, and the
employees. Companies can work with the government to provide training to the staff so that the suppliers
can embrace sustainable practices while providing training on the area such as sustainable sourcing,
energy efficiency and responsible labor practices. To further enhance ESG, the suppliers should be audited
and assessed formally to measure its progress. The assessment and audits should revolve around ESG
dimensions which includes carbon emissions, waste management, labor practices and ethical sourcing.
Hence, more suppliers are going to join the bandwagon as the platform provides help to the supplier to
achieve ESG criteria and sustainable practice.

In conclusion, the journey towards sustainable future is a modern business atmosphere as it encompasses
to the extent well beyond a company’s own walls. It can be said that it is a moral obligation and strategic
move to collaborate with suppliers in order to align their practices with ESG criteria. Suppliers can possibly
enhance their sustainability in business while providing a catalyst to positive change throughout the
supply chains, and contributes to sustainable future when all parties are embracing collaborative
approach’; be it the government, companies and consumers.
Question 2

The world is in the transformation of the energy sector from fossil-based to zero-carbon. There is a
need to reduce CO2 emissions to limit climate change. Decarbonization of the energy sector requires
urgent action on a global scale, and while a global energy transition is underway, further action is
needed to reduce carbon emissions and mitigate the effects of climate change. The idea of
decarbonization is related to the principles of the circular economy. Discuss

Climate change has poses danger to humanity and it is now more important than ever for the energy
industry as the key component to the global fight against carbon emissions. Most energy industries in the
world are now trying to make an innovative change to move away from fossil-based energy sources to
provide energy and committing to zero-carbon substitutes. Moreover, circular economy is gaining
popularity as it provides a business model that is more sustainable, better efficiency in managing
resources, and helping consumers to be more responsible to the environment. This essay should examine
the relationship between the structure of circular economy and the decarbonization of the energy sector
in order to provide a resilient and sustainable future for the planet earth.

Decarbonization is a term to define the dire need to reduce carbon dioxide emissions in order to mitigate
the negative impact of climate change to the environment, and humanity. Global warming comes from
the trap heat in the Earth’s atmosphere where burning of fossil fuels is one of the major culprit as it emits
relentless steam of greenhouse gases. Hence, decarbonization is the solution to the climate change where
it seeks to shifting towards a cleaner renewable energy sources to sustain the world for the next
generation.

On the other hand, circular economy provides a paradigm of resource responsibility as a whole as it
involves every parties in the value chain be it the upstream, midstream, downstream and retail. Circular
economy replaces the conventional business model of linear economy where it provides a holistic
approach for everyone to manage the resources where it promotes sustainability as most of the resources
do not go to waste.

To show relations between these two (decarbonization and circular economy), it is important to note that
circular economy provides a framework for a better resource efficiency. Energy sector could optimize the
energy production and consumption in order to minimize waste while maximize utility as the resources
are used efficiently. With efficient resource management, more energy can be used while emitting lower
carbon. For an example, palm oil industry itself has emitted carbon but with more resource management,
the byproduct of palm oil such as biomass could be used to provide energy where the resources are fully
utilized.

Renewable energy technologies are by nature are circular resources. This is because renewable energy is
providing energy by using resources that could be replenished such as sun, and wind. This is a direct
relationship between decarbonization and circular economy as renewable energy usually does not emit
carbon and the resources does not go to waste as it harnesses the energy from the nature. It can be said
that renewable energy aligns with the principle of circular economy as it uses regenerative resources and
not the ones that could be diminished.
Circular economy also involves responsible sourcing and sustainable supply chains where the buyers and
consumers are interconnected to manage the resources. Recycling and reusing resources in the context
of energy means that the renewable technologies are able to ensure that the resources used are being
ethically funneled to the right direction. For an example, consumer could simply just recycle the unused
products for companies to repair, or refurbished the product so it can be used again. For an example,
the light bulb that is broken can be returned to the company where the company could provide an
incentive or rebate so that the product can be used again. This shows resilience and sustainability effort
as both; circular economy and decarbonization are being underpinned as broken product is being
recycled to prevent from carbon emission due to waste product and the product can be used again after
it is being repaired.

In conclusion, circular economy and decarbonization are dependent of each other as this would
absolutely reduce the carbon emission. When combined together, it can promote responsible resource
use, mitigate climate change and providing sustainable and resilience future as it enhances the effort to
reduce carbon emission. Decarbonization and the circular economy highlights the importance for
worldwide cooperation and decisive implementation which involves everything in the earth. Hence,
these two is a powerful tool to accelerate the commitment made in the Paris Agreement to reduce 45%
greenhouse gas emission.

References:

1) www.weforum.org/agenda/2023/03/investors-can-care-about-firms-regulated-carbon-
emissions/
2) https://www.conserve-energy-future.com/9-ways-businesses-can-benefit-renewable-
energy.php
3) https://www.imsm.com/my/iso-
14001/?keyword=iso%2014001%20certification%20requirements&matchtype=e&network=g&d
evice=c&utm_term=iso%2014001%20certification%20requirements&utm_campaign=LOL+-
+MY+14001&utm_source=adwords&utm_medium=cpc&hsa_acc=6502988913&hsa_cam=1335
9494773&hsa_grp=121841578454&hsa_ad=525448678315&hsa_src=g&hsa_tgt=kwd-
301109606335&hsa_kw=iso%2014001%20certification%20requirements&hsa_mt=e&hsa_net=a
dwords&hsa_ver=3&gad=1&gclid=EAIaIQobChMI_tOZ__rRgQMVkBSDAx2WEw5CEAAYASAAEgL
27_D_BwE
4) https://www.iso.org/standard/60857.html