BUILDING A SUSTAINABLE FUTURE : ESG IN THE CONSTRUCTION INDUSTRY

Photo Credit : QHSEL Website

The construction industry is one of the world’s largest contributors to greenhouse gas (GHG) emissions, resource consumption, and waste generation. In today’s global business environment, Environmental, Social, and Governance (ESG) principles are becoming essential for sustainable development, risk mitigation, and long-term value creation in construction projects.

1) Environmental Responsibility

Construction activities can have significant environmental impacts - energy consumption, carbon emissions, water usage, and soil disturbance. By adopting ESG practices, companies can implement measures:

• Using low-carbon/recycled construction materials.
• Implementing energy-efficient machinery/renewable energy sources on-site.
• Applying water management and reduction plans.
• Incorporating green building designs that minimize the carbon footprint.

Simulated Case Study: ABC Construction Sdn. Bhd. undertook a mid-sized residential project in Malaysia. Through ESG-aligned practices, the company opted for precast concrete elements to reduce material waste, used solar-powered lighting on-site, and established a strict water runoff management system. As a result, carbon emissions were reduced by an estimated 20%, and water usage dropped by 15% compared to traditional construction methods.

2) Social Responsibility

The ‘S’ in ESG emphasizes people - workers, communities, and stakeholders. 

Construction companies can: 

• Ensure worker safety and fair labor practices.
• Engage local communities to minimize social disruption.
• Promote diversity and inclusion in hiring practices.

In the ABC project, the company implemented robust occupational health and safety protocols, conducted monthly community engagement sessions, and trained local workers in new construction technologies. This strengthened community relations and improved employee morale.

3) Governance

Strong governance ensures transparency, accountability, and ethical conduct. 

Construction firms should:

• Maintain clear policies on anti-corruption and compliance.
• Implement project monitoring and reporting systems.
• Establish ESG performance KPIs linked to executive compensation.

ABC Construction adopted a digital reporting system to monitor ESG metrics in real-time, allowing the management team to track environmental targets, safety incidents, and supplier compliance. This transparency boosted investor confidence and positioned the company as a responsible market leader.

Conclusion

Integrating ESG principles into the construction industry is no longer optional - it is a strategic imperative. Companies that proactively embed ESG into their projects can reduce environmental impact, foster positive social outcomes, and enhance governance practices. The ABC Construction case demonstrates that ESG-aligned approaches are practical, measurable, and capable of delivering both financial and societal value.

THE COST OF PROGRESS - DEVELOPMENT VS ENVIRONMENTAL SUSTAINABILITY IN MALAYSIA

Every nation dreams of progress. But progress without balance comes at a price and Malaysia is beginning to feel the cost - floods, recurring slope failures, and severe erosion events are not acts of nature alone, they are the echoes of our own choices. As the nation accelerates its infrastructure and urban expansion, environmental sustainability too often becomes a footnote, rather than a foundation.

1) When Development Turns Disruptive

Hill-cutting for highways, clearing forests for housing, and altering natural waterways for new industrial zones do have consequences even how good the risk assessment is. The soil no longer holds, the rivers overflow, and the cost of repairing damage exceeds what was saved in the first place.

Each disaster is a reminder - we are building faster than we are thinking.

2) ESG: Beyond a Corporate Buzzword

Environmental, Social, and Governance (ESG) principles are not just for listed companies, they are the new language of accountability for every contractor, developer, and policymaker.

Projects that ignore ESG risk may potentially becoming liabilities - financially, socially, and politically. Responsible contracting must now mean assessing environmental impact, enforcing erosion control, and ensuring compliance is not just “paperwork,” but practice.

3) Responsible Contracting and Leadership

Governments and developers must demand accountability throughout the project chain. It’s not enough to meet deadlines or reduce costs, sustainability should be treated as a performance metric.

Tender evaluations should include environmental stewardship. Site supervision must prioritize ecological safety alongside technical compliance.

4) We Need Real Sustainable Progress

Malaysia doesn’t need to slow down, it needs to WISE up.

True progress doesn’t destroy what sustains us, it preserves it for the next generation. Every hill, river, and forest has value far beyond its immediate commercial worth.

If we continue to equate “development” with “deforestation,” we are not progressing, we are merely shifting the cost from our balance sheets to our children’s future.

Key Technical and Community Concerns over the Redevelopment of Wisma Damansara

Credit : freemalaysiatoday

Big names such as celebrity Celebrity Dato' Sheila Majid, former CIMB chairman Tan Sri Nazir Razak, former minister Khairy Jamaluddin, Capital A Bhd CEO Tan Sri Tony Fernandes and activist Ambiga Sreenevasan join residents in protesting redevelopment of Wisma Damansara 

Introduction and Disclaimer

This is an independent, non-expert third-party perspective on the proposed redevelopment of Wisma Damansara. The views below are based on my personal understanding and publicly available information. They are not intended to influence ongoing residents’ protests, nor the developer’s obligations to comply with all relevant laws and regulations.

1) PROPOSAL

The old Wisma Damansara, a 16-storey commercial building, is proposed to be redeveloped into two 60-storey towers comprising residential and commercial/retail components.

The project carries a proposed plot ratio of ~1:9.6, which many residents argue is excessive compared to the 1:6 figure reflected in the KL Local Plan 2040 for the area.

The developer (BRDB) has submitted the proposal as a flagship project. DBKL held a Rule-3 consultation, receiving hundreds of objections primarily on density and traffic. Both DBKL and the developer have stated the application is under review based on the KL Local Plan and redevelopment incentive rules.

2) KEY CONCERNS BY RESIDENTS (Beyond Traffic Congestion)

2.1 Plot Ratio and Density

The proposed density far exceeds planning guidelines, leading to concerns about overdevelopment. Some residents question whether redevelopment incentives (which allow higher plot ratios) are being applied appropriately, and whether sufficient oversight and accountability exist.

3) ZONING, LAND USE AND NEIGHBOURHOOD CHARACTER

The project departs significantly from the KL Local Plan 2040, raising fears of a precedent for further over-dense developments,

Damansara Heights and Bukit Damansara are historically low-density bungalow areas. High-rise towers are viewed as inconsistent with this character,

Concerns include loss of privacy, where tall buildings may overlook existing gardens and homes.

4) INFRASTRUCTURE STRAIN 

Beyond traffic, residents cite stress on water supply, sewage systems, utilities, and local roads.

Many argue infrastructure upgrades must come before approving higher-density projects, not after.

5) HEIGHT, SKYLINE AND VISUAL IMPACTS

Introducing 60-storey towers in a low-rise setting will alter the skyline and neighbourhood views,

Beyond aesthetics, technical issues such as shadowing, wind effects, and blocked views may arise.

6) GEOLOGICAL AND CONSTRUCTION RISKS 

Bukit Damansara’s rocky terrain may require heavy excavation and rock blasting, potentially affecting land stability,

Risks include vibration, noise, and possible damage to nearby structures.

While no direct reports specific to Wisma Damansara have surfaced, this remains a valid concern.

7) FACTS CHECK (PUBLIC RECORD)

Publicly available information on the redevelopment is limited.

What is visible: the developer’s proposal (high plot ratio, mixed-use towers), DBKL’s Rule-3 public consultation, and significant resident objections.

8) LIMITATIONS OF MY OPINION

At the time of writing, no full technical documentation has been publicly disclosed. It might be available though. Not limited to the following and the breakdown of explanation, the documentations are :

These requirements need to be addressed clearly in a Construction Management Plan and Contractual Requirements.

 10) Closing Note

 For a project of this scale, transparent disclosure of technical studies is essential to ensure that redevelopment proceeds responsibly, in line with planning law, and with due regard for community well-being.

ESG IN MALAYSIA - PROGRESS, PITFALLS AND LESSONS FROM ISO - HARD TALK - NIK ZAFRI

Back in the 90s, ISO certifications were all the rage. Everyone wanted one, often not to improve their systems, but simply because they didn’t want to be left behind. That was the wrong mindset. ISO and any system was meant to shape culture, discipline, and resilience, not just tick compliance boxes.

Today, the buzzword is ESG (Environmental, Social, Governance). Since 2023, I’ve seen ESG on the agenda of almost every organization I visit in Malaysia. But those with real system implementation experience know this - ESG isn’t a sprint. It takes time to embed into culture.

Malaysia has made some strong moves such as the National Energy Transition Roadmap (NETR) and National ESG Framework (NSRF), net-zero by 2050 targets, and even carbon market development. GLCs like Petronas, Sime Darby, and Maybank are integrating ESG into strategy and reporting. Industries like palm oil and electronics are under global pressure to comply. Green bonds, sustainability-linked loans, and Bank Negara’s climate risk measures show regulators are also pushing.

But the gaps are clear. SMEs which make up 97% of businesses often see ESG as costly compliance. Data is fragmented, standards vary, and greenwashing risks remain. Malaysia lacks ESG professionals, and universities are not producing enough ESG-literate graduates. On top of that, “S” (Social) and “G” (Governance) often take a back seat to “E” (Environment), while enforcement remains patchy.

So when some claim being a “leader” in ESG, I see it differently - it's a kind of defensive mechanisms towards a consultant especially an assessor. We can claim leadership in ambition and frameworks, but not yet in consistent execution. It’s better to say “we are working on it” than “we know everything.” The ISO era taught us the same lesson - systems must live in culture, not just compliance reports.

First of all, before claiming leadership in ESG, know the rules first. Standards such as ISO and other international frameworks provide guidelines, but ESG implementation is not a one-size-fits-all matter. Different industries have different approaches, and even within the same sector, practices can vary. From one system to another, from one implementation to another, the problems and shortcomings are also unique to the nature of each industry.

Regionally, Malaysia is ahead of several ASEAN peers, but not yet at Singapore’s level in governance and investor recognition. Globally, we are still developing with the next big tests being mandatory reporting in 2025, carbon pricing, SME adoption, and strong enforcement against greenwashing.

ESG in Malaysia is real, but uneven. The challenge now is not to chase labels of “leadership” but to build authentic, lasting practice from the boardroom to the supply chain, from corporates to SMEs.

So stop "boasting"

Data Centers in Malaysia: Purpose, Potential, and Challenges - Overview by Nik Zafri

1) INTRODUCTION

In today's digitally driven world, data centers form the backbone of national infrastructure. Malaysia has been steadily positioning itself as a strategic hub for data center development, thanks to its stable climate, strategic geographic location in Southeast Asia, robust connectivity, and pro-investment government policies. But beyond the appeal lies the complex reality of running and maintaining high-performance data centers.

2) PURPOSE

Data centers are specialized facilities designed to store, process, and disseminate digital data. They host the infrastructure that supports cloud computing, enterprise operations, government digital transformation initiatives, content delivery, banking and finance transactions, e-commerce platforms, and a vast range of online services.

Organizations depend on data centers for:

• Data storage and backup
• Secure hosting environments
• Disaster recovery and business continuity
• Real-time data processing
• Edge computing and IoT integration

In short, data centers are the nervous system of modern economies, quietly powering everything from emails to AI workloads.

2.1 WHY IT MATTERS

Data centers store, process, and manage the data that powers:

• E-commerce and online banking,
• Cloud computing and SaaS platforms,
• Smart cities and IoT ecosystems (Urban Intelligence)
• AI and big data analytics
• Business continuity and Integrity
• Disaster recovery solutions

Malaysia’s appeal as a data center location includes:

• Proximity to global undersea cable landing points,
• Growing demand from the ASEAN digital economy, 
• Competitive energy prices and workforce,
• Political neutrality, compared to other regional hubs

2.2 INDUSTRY GROWTH

According to MDEC, Malaysia has attracted over RM10 billion in data center investments over the past five years. Demand is expected to double by 2030, driven by cloud adoption, 5G, and AI.

Globally, Malaysia ranks in the top 5 emerging APAC data center markets, with multiple projects in progress or recently completed.

3) ADVANTAGES

3.1 Strategic Location - Malaysia’s proximity to major Asian markets makes it an ideal node in regional data flow.

3.2 Competitive Energy Costs - Energy prices remain relatively competitive compared to neighboring countries, critical for an industry that is extremely power-intensive.

3.3 Regulatory Support - The Malaysian government has introduced incentives for digital infrastructure investments under its various economic blueprints and digital economy initiatives.

3.4 Abundant Talent Pool - Local universities and polytechnics are producing graduates in ICT, engineering, and technical fields that support operations and maintenance needs.

3.5 Political Stability and Neutrality - For global companies concerned with data sovereignty and neutrality, Malaysia remains a stable and neutral ground.

4) CHALLENGES

Despite the growth and demand, data centers face multiple operational and maintenance issues, such as:

4.1 Power Reliability and Redundancy - Even short interruptions in power can lead to data loss or downtime. Although backup systems (like UPS and generators) are standard, poor maintenance or system misconfigurations can lead to failure during critical moments.

Some sites face unexpected generator failures due to irregular servicing or fuel contamination. In one real-world scenario, a testing exercise revealed backup power would not kick in within 10 seconds, a violation of Tier III design expectations.

Requiring - Strict load testing regimes, fuel conditioning, and biannual third-party audits of generator and UPS systems.

4.2 Cooling System Efficiency - Malaysia’s tropical climate demands efficient and scalable cooling systems. Overreliance on traditional air conditioning systems leads to higher energy consumption and operational costs.

At least one facility experienced 15% higher PUE (Power Usage Effectiveness) than design specs due to unsealed raised floors and inefficient hot aisle containment. This raised operational costs significantly.

4.3 Security Threats - Both cybersecurity and physical security are ongoing concerns. Breaches whether digital or physical can result in substantial financial and reputational damage. Many operators still rely on legacy security systems. One attempted intrusion during a patching window exploited outdated firewall settings. While no data was lost, it triggered urgent compliance reviews.

4.4 Resource Management - This includes everything from water for cooling to land use and waste disposal (especially for e-waste and batteries). Improper handling poses environmental and compliance risks.

4.5 Latency and Connectivity Bottlenecks - As demand grows, ensuring low-latency and high-bandwidth connectivity becomes increasingly challenging, especially when scaling out to meet regional or edge-computing needs.

4.6 Maintenance Downtime - Scheduled maintenance can still pose risks if not properly coordinated with clients and redundancies. Poorly planned upgrades may cause unexpected interruptions.

5) MITIGATION

To keep operations efficient and sustainable, data center developers and operators adopt several best practices:

5.1 Tiered Redundancy Designs - Using globally recognized standards such as Tier ratings, data centers can plan for different levels of fault tolerance and downtime acceptability.

A Tier III-level facility experienced significant downtime risk during an annual preventive maintenance when a generator load bank failed. This led to reengineering of their maintenance coordination process using a three-layer escalation protocol, including simulation testing of N+1 configurations.

The lesson: "Redundancy on paper is not resilience in practice without rigorous testing and alignment with live operational behaviors."

5.2 Efficient Cooling Solutions - Implementing advanced technologies like liquid cooling, hot/cold aisle containment, and AI-based temperature optimization systems can greatly reduce power usage. (e.g.) Adoption of liquid cooling, AI-controlled HVAC, CFD simulation for airflow design.

5.3 Regular Audits and Testing - Continuous commissioning, predictive maintenance, and disaster simulation exercises ensure system readiness and resilience.

5.4 Adoption of Green Technologies - Use of renewable energy sources, energy-efficient servers, and LEED-certified building materials can reduce carbon footprint and improve ESG compliance. This is also related to Climate Change which is addressed in ABMS ISO 37001 where the companies need to start developing the system and applied for certification.

5.5 Cybersecurity Frameworks - Implementing zero-trust architectures, regular penetration testing, and compliance with relevant standards to enhance security readiness. (e.g. Shift toward Zero Trust Architecture, network segmentation, and regular penetration testing per ISO/IEC 27001 and NIST SP 800-53)

5.6 Environmental, Social, and Governance (ESG) compliance is becoming non-negotiable. Stakeholders, especially global hyperscalers are demanding green certifications and energy usage transparency.

Key metrics to monitor:

• Power Usage Effectiveness (PUE): Optimal < 1.5
• Water Usage Effectiveness (WUE): Minimal where air-cooled solutions are viable
• Renewable Energy %: Still below 15% for most Malaysian DCs (2024)

5.7 Up-skilling Workforce - There’s an ongoing shortage of Uptime-certified engineers and facility managers. Most sites operate with lean teams, increasing the risk of fatigue-related human error. Continuous training and certification for data center staff is vital to keep up with evolving technologies and protocols. 

6.0 WHAT FUTURE-READY DATA CENTERS TO LOOK LIKE

• Design for Modularity and Scalability
• Avoid over-provisioning. Build in phases, leveraging prefabricated solutions.
• Implement AI-Driven Monitoring
• Use predictive maintenance, anomaly detection, and real-time environmental monitoring.
• Green Certification Pathway

Plan for LEED, GreenRE, or ISO 50001 and ABMS ISO 37001 (2025) compliance from the design phase.

6.1 Community Engagement and Transparency

As energy-intensive operations, data centers must engage openly with local communities, sharing ESG reports and impact disclosures.

6. CONCLUSION

Malaysia’s data center industry is poised for continued growth, fueled by digital transformation, e-commerce expansion, and regional demand. However, as reliance on data increases, so does the complexity of maintaining these mission-critical facilities. With proper design, proactive risk management, and sustainable practices, Malaysia can continue to offer reliable and efficient data center services contributing significantly to both its economy and digital aspirations.

9 QUALITIES TO BECOME A GOOD LEADER - NIK ZAFRI

These are insights I’ve gathered over the last 30 years through experience and observation. When I first wrote this in 1999, there were 14 points but I’ve since summarize them into 9 core qualities, refined to suit 2025 and beyond. I’ve made them clear, memorable, and practical for everyday leadership.

It's my version of "Leadership" module

Of course, it shouldn’t take you another 30 years to apply them. Who knows, your leadership journey might just begin today.

1) KNOWLEDGABLE 

A good leader must possess strong domain knowledge and be well-informed about the industry, current trends, and the specifics of the organization. This includes:

• Technical expertise and decision-making frameworks,
• Understanding the roles and responsibilities of the team,
• Being aware of external factors like market forces, regulations, and competitors.
• Staying updated through continuous learning, training, and reading.

Why it matters: A knowledgeable leader earns respect, gives informed direction, and avoids costly mistakes.

2) DO THE RIGHT THING

Integrity and ethics are non-negotiable traits of leadership. 

• Stand for principles even when it’s hard or unpopular,
• Uphold fairness, transparency, and accountability,
• Be a role model in behavior, honesty, and consistency, lead by example

Why it matters: People follow leaders they trust. 

Doing the right thing builds long-term loyalty and credibility.

3) HEAD TO THE RIGHT DIRECTION

Leadership is about setting and aligning everyone with a clear vision.

• Set logical, measurable and achievable goals based on strategic foresight,
• Align the team’s work with the organization’s mission and values.
• Periodically reassess the path to ensure relevance.

Why it matters: A leader without direction leads a team to confusion. Purposeful direction gives clarity and unity.

4) WORK HARDER

Effort and commitment are infectious.

• Show dedication and passion through your work ethic.
• Don’t shy away from getting your hands dirty when needed.
• Be willing to put in the extra time to support your team or resolve crisis.

Why it matters: Hardworking leaders inspire their teams to rise above mediocrity and follow by example.

5) THINK OF NEW WAYS

If you're a seasoned professional, you may need to work with the younger generation. Innovation keeps the organization relevant and competitive.

• Be open to change and embrace creative thinking,
• Encourage brainstorming and experimentation without fear of failure (should you fail, do it again),
• Look for improvements in processes, products, and people development.

Why it matters: Stagnation is the enemy of progress. Leaders must innovate to adapt and thrive.

6) MAKE THE BEST DECISION

Not a popular decision, but the best decision

• Decision-making is at the heart of leadership,
• Base your choices on facts, resources, data, experience, and intuition, 
• Involve stakeholders when appropriate, but take responsibility and to be accountable,
• Balance risks and rewards with long-term implications in mind.

Why it matters: The ability to make timely, sound decisions determines whether a team succeeds or struggles.

7) BUSINESS SUSTAINABILITY

Leadership must consider long-term viability, not just short-term gains.

• Balance economic success with environmental and social responsibility (ESG), 
• Invest in people, processes, and technologies that support sustainable growth.
• Make ethical decisions that preserve reputation and resources.

Why it matters: Sustainability ensures your organization endures and thrives in an ever-changing world.

8) BE A GOOD LISTENER

Effective communication starts with listening.

Practice active listening, seek to understand, not just to respond,

Show genuine empathy and openness to different views and feedback,

Use listening as a tool to detect problems early and build trust.

Why it matters: People feel valued and motivated when they are heard. It improves morale, loyalty, and problem-solving. (AND always reward good ideas)

9) CONTINUAL IMPROVEMENT

Strive for excellence, not perfection.

Promote a culture where learning and improvement are continuous,

Encourage reflection, feedback, and growth - personally and organizationally,

Invest in upskilling, process optimization, and quality enhancement.

Why it matters: In a rapidly evolving world, continuous improvement is necessary to stay competitive and agile.

CONCLUSION 

"The impact of doing something is FAR more greater than doing nothing at all" - Nik Zafri

"True leadership is not about authority, it's about responsibility, humility, and vision" - Nik Zafri

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HOW GREEN INITIATIVES LIKE RECYCLING, INDUSTRIAL SYMBIOSIS, WASTE RECOVERY AND ALTERNATIVE ENERGY IMPACT CLIMATE CHANGE AND GLOBAL WARMING

 An overview by Nik Zafri

Sustainability has always been close to my heart. Over the years, I’ve had the opportunity to evaluate many green initiatives led by corporations, and it fills me with hope to see real progress taking shape. I believe every industry has a role to play, and I encourage all sectors to rise to the challenges for the sake of our planet, our children, and the future we all share.

Green initiatives should come not just from fear of laws and penalties, but from a genuine love for our planet and the hope of leaving behind a cleaner, better world for the next generation. When we act from the heart, the impact is deeper and more lasting.

1.0 RECYCLING

a. Recycling - saves raw materials and energy. For example, recycling aluminum saves up to 95% of the energy needed to produce new aluminum from ore.

b. Reduces greenhouse gas (GHG) emissions associated with mining, refining, manufacturing, and waste decomposition in landfills (landfills emit methane, a potent GHG).

2.0 INDUSTRIAL SYMBIOSIS

One company's waste becomes another company's raw material.

a. Reduces the overall resource extraction, manufacturing emissions, and waste disposal.

Example: Excess steam from one factory used to power another can cut both CO₂ emissions and fossil fuel use.

b. Landfill usage - reduces landfill volumes (landfills = methane) and prevents open burning, which releases CO₂ and other pollutants.

3.0 ENERGY RECOVERY

Recovering energy (like biogas from organic waste) or materials (like scrap metals) means less dependence on extracting virgin resources.

Seeking ways to generate alternative energy sources (solar, wind, hydro, bioenergy) will drastically cut reliance on fossil fuels like coal, oil, and natural gas.

Renewable sources emit little to no direct GHGs during operation, hence mitigating the root cause of global warming.

4.0 SUMMARY 

These initiatives cut carbon emissions, limit pollution, and prevent further resource depletion, all of which directly slow down the pace of climate change and global warming.

5.0 HOW GREEN INITIATIVES CONTRIBUTE TO ESG 

(Environmental, Social and Governance)

5.1 Environmental (E)

a. Direct impact - conserving resources, reducing emissions, and promoting biodiversity.

b. Companies adopting these initiatives show proactive management of environmental risks.

Social (S)

a. Creates green jobs (e.g., recycling centers, renewable energy technicians).

b. Improves community health by reducing pollution and waste.

c. Promotes energy access, especially in rural areas (e.g., off-grid solar).

Governance (G)

Many clients asked the same question, my answer is the same : 

a. It indicates leadership and ethical responsibility in decision-making.

b. It demonstrates compliance with environmental laws and international sustainability standards thus helping the implementation of EMS ISO 14000, LEEDS, GBI, Energy Audit etc.

c. It builds trust among investors, customers, and regulators, because the company is seen as managing long-term risks smartly.

Bottom line -  Green initiatives = fighting climate change + strengthening ESG credibility, leading to a win-win for the planet and for sustainable business growth.

CONCLUSION (For now)

True commitment to green initiatives must transcend fear of regulatory action. It should be rooted in a sincere respect for the environment and a conscious effort to build a sustainable legacy for those who come after us. Sustainability driven by values, not fear, creates real and lasting change.

SCARCITY OF SUPPLY IN THE OIL AND GAS AND HOW ESG COULD HELP EASE THE PROBLEM - Nik Zafri

It is an acknowledged fact that there is a scarcity of supply in the oil and gas industry. This will definitely affect both global markets and energy strategies 

We are feeling the pinch whether we realize it or now. As supply dwindles or becomes unstable, oil and gas prices rise. This affects everything from transportation to manufacturing, as oil and gas are key to energy production and as raw materials for many industries. In 2022, the U.S. faced significant spikes in oil and gas prices, possibly due to Russian-Ukraine conflict. This led to higher gasoline prices, with some regions seeing prices over $5 per gallon. Rising energy costs also increased the price of goods and services, contributing to inflation and squeezing consumers' disposable income. 

Countries that heavily rely on oil imports may face national security risks due to dependence on unstable or hostile regions. This could lead to geopolitical tensions as nations compete for remaining supplies.

Germany has long been dependent on Russian natural gas, which made up a significant portion of its energy supply. When Russia cut gas supplies during the Ukraine war, Germany faced an energy security crisis. Nigeria, one of Africa’s largest oil producers, has an economy highly dependent on oil exports. In recent years, declining global oil prices have severely impacted its economy. For example, the 2014-2016 oil price crash caused a recession in Nigeria as government revenues and foreign exchange reserves plummeted.

Energy-intensive industries, such as transportation, manufacturing, and logistics, would face increased operational costs. Inflation could rise as the cost of goods and services increases.

Governments may be pushed to accelerate policies aimed at reducing reliance on fossil fuels, speeding up transitions to greener energy sources. Denmark has been a leader in climate change action, using the oil and gas supply issues as an opportunity to accelerate its renewable energy transition. In 2020, Denmark announced a plan to phase out all oil and gas exploration in the North Sea by 2050 and committed to cutting greenhouse gas emissions by 70% by 2030.

Countries whose economies are heavily reliant on oil exports, such as those in the Middle East and Africa, might face economic instability as revenues decline, especially if global demand shifts due to green energy policies.

Environmental, Social and Governance (ESG)

Pushing the Environmental, Social, and Governance (ESG) initiatives and Sustainable Development Goals (SDGs) is critically important in addressing the challenges posed by oil and gas scarcity, rising energy prices, energy security concerns, economic disruptions, and climate change. 

Renewables are abundant, sustainable, and have become increasingly cost-effective. Solar and wind, in particular, have seen significant technological advancements, making them scalable and more affordable. 

Nuclear power is a low-carbon energy source with a high energy output. It's a reliable alternative that can provide consistent baseload power.

Hydrogen can be used as a clean fuel, especially for industries where electrification is difficult (such as aviation, shipping, and heavy industry). When produced using renewable energy (green hydrogen), it becomes a low-emission alternative.

Biofuels are derived from organic materials and can serve as a direct substitute for conventional fuels in vehicles and other equipment, reducing dependence on oil.

Geothermal energy is another renewable source that provides consistent energy output and can complement other renewable sources like solar and wind.

• Environmental Impact Reduction (ESG: Environmental / SDG 7, 13)

One of the primary drivers of oil and gas scarcity is environmental degradation, fossil fuel dependence, and rising demand. ESG and SDG frameworks prioritize a transition to cleaner, renewable energy sources like solar, wind, and geothermal, reducing reliance on finite resources. For instance, SDG 7 (Affordable and Clean Energy) promotes increasing the share of renewable energy in the global energy mix, while SDG 13 (Climate Action) targets urgent actions to combat climate change. Enhancing Energy Security (ESG: Governance / SDG 7):

Countries dependent on oil and gas imports are vulnerable to geopolitical instability and supply shocks (e.g., the European energy crisis due to the Ukraine war). SDGs, particularly SDG 7, encourage the development of diversified, renewable energy sources that can enhance energy security.

Companies like #Tesla and countries like Denmark are leaders in this space, shifting toward renewable energy as a core part of their ESG commitments, reducing emissions, and ensuring long-term sustainability.

• Mitigating Economic Disruptions (ESG: Social and Governance / SDG 8, 9):

Economic disruptions due to rising oil prices can impact businesses, households, and governments, particularly in countries reliant on fossil fuel industries. ESG’s social focus on fair labour practices and economic inclusion aligns with SDG 8 (Decent Work and Economic Growth) and SDG 9 (Industry, Innovation, and Infrastructure), which encourage innovation and investments in sustainable infrastructure and technology. This promotes resilient economic systems that are less vulnerable to fossil fuel price fluctuations.

Countries and corporations that diversify their energy sources and invest in green technology can build more stable economies. For instance, Iceland, which relies heavily on geothermal energy, enjoys energy security and price stability, even during global oil shocks, making its economy more resilient. Furthermore, oil-dependent economies like Nigeria need to invest in renewable energy and technology to reduce vulnerabilities to oil price volatility and ensure more sustainable economic growth.

• Accelerating Climate Action (ESG: Environmental / SDG 13):

Climate change is driven by greenhouse gas emissions, most of which come from fossil fuels. SDG 13 (Climate Action) emphasizes the urgent need to combat climate change by reducing emissions, and ESG frameworks push companies and governments to take immediate action in line with these goals.

Climate action is not just a moral obligation but also a financial and security necessity. ESG investments often outperform fossil-fuel-heavy companies in the long term, as markets and regulations increasingly favor sustainability. Furthermore, focusing on decarbonization efforts through ESG and SDGs not only mitigates the effects of climate change but also protects vulnerable populations from its worst impacts.

Countries like Sweden and companies like #Unilever have shown that ambitious climate action can drive innovation and financial success. These entities have incorporated ESG principles and have actively pursued SDG-aligned strategies to decarbonize their operations.

Pushing ESG and SDG initiatives is essential to solving the interconnected challenges of oil and gas scarcity, energy security, economic disruption, and climate change. By fostering cleaner, more sustainable industries and infrastructures, ESG and SDG goals create resilient, future-proof systems that can adapt to resource constraints while also addressing environmental and social issues at their core. These frameworks not only help mitigate the current problems but also lay the foundation for a more sustainable, equitable future.