Climate change is one of the significant challenges of our time which also brings opportunities for innovation and resilience. According to the Intergovernmental Panel on Climate Change (IPCC), global warming has already reached 1.1°C, highlighting the urgency for action to reduce its effects and protect our future.
As we deal with the impact of rising temperatures and extreme weather on environment, economies, and societies, the impact also encourages us to adopt sustainable practices. Human activities have increased greenhouse gas levels, making it essential to shift to cleaner energy sources and create a more sustainable future.
Malaysia, rich in natural resources, is uniquely equipped to address and adapt to climate change. Although the country faces challenges such as floods, heatwaves, and strong winds, these issues motivate us to enhance our infrastructure and operations. By focusing on resilience, we can ensure minimal interruptions of electricity supply, optimise maintenance costs, and strengthen safety in our operations, among our employees and vendors as well as the public.
Aligned with Malaysia's National Climate Change Policy 2.0, TNB is actively adopting strategies to protect assets and improve operational resilience. These initiatives reflect TNB's commitment to a sustainable future, reinforcing its role in addressing climate change and safeguarding Malaysia’s energy security.
Figure 1: Framework of the National Climate Change Policy 2.0
We acknowledge our significant role in navigating climate change, potential risks and opportunities for our infrastructure and business sustainability. Since 2019, we have adopted the Task Force on Climate-related Financial Disclosures (TCFD) framework to guide our efforts in addressing climate-related risks and opportunities. By adopting this comprehensive approach, we ensure a thorough evaluation of the financial impacts of climate change, enabling informed and sustainable decision-making.
Figure 2: TCFD Core Elements
TNB's Commitment towards Addressing Climate Risks
In line with the TNB Sustainability Policy and TNB Environmental Policy, we have adopted a commitment in reducing emissions, enhancing energy efficiency, and implementing impactful climate change mitigation and adaptation measures as outlined in the TNB Energy Transition Plan.
Our commitment to address climate risks starts at the board level, with the Board Sustainability and Risk Committee (BSRC) taking an active role in overseeing the Group’s sustainability performance, ensuring alignment with our approved strategies and targets. The BSRC regularly monitors our carbon emissions and sustainability initiatives using forward-looking Key Risk Indicators reported in the TNB Risk Dashboard.
In addition, the TNB Board of Directors approves the Group's sustainability disclosures, as required by Bursa Malaysia, to ensure transparency in addressing climate risks and opportunities in alignment with TCFD guidelines.
At the management level, our dedication to address climate risks is reflected with the establishment of Key Performance Indicators (KPIs) at the CEO level, and key C-suite, which includes Managing Director of TNB Power Generation Sdn. Bhd., Chief New Energy Officer, and Chief Sustainability Officer. These KPIs are evaluated annually through the Short-Term Incentive program, aligning accountability with senior management’s remuneration to drive both implementation and performance.
Securing a Resilient Future
As the global climate crisis intensifies, organizations must proactively manage their risks and capitalize on opportunities presented by climate change. In TNB, our priority is to ensure that our business is resilient in addressing climate exposures with continuous assessment to adapt to transition and physical risks and opportunities in the short, medium and long-term horizon. Our commitment to sustainability is embedded in our strategic decisions, risk assessments, and operational practices, ensuring that we contribute to climate goals while safeguarding the long-term resilience of our business.
As continuity, the ESG Story on ‘TNB’s Climate Adaptation Strategy’ will be featured in the next publication.