I recently spent a week in Malaysia with my colleague John Hsu working on a SWITCH-Asia project, funded by the EU, which aims to promote principles of sustainable production and consumption across the region. We’re just starting the second year of a three year project, which is focusing on the construction sector in the country.
Travelling out from a very rainy winter in the UK it was interesting to see that it has not just been the British getting wet recently. The people we have been working with tell me how strange the weather has been. It has been unseasonably mild in Malaysia, but there has also been significant flooding in December and January.
This could be one of the reasons that sustainability seems to be very much in the public consciousness in Malaysia. When looking at the national newspapers I could often see articles and editorials on climate change. Businesses here also seem to be taking more and more action, driven not just by the public but also by greater demands from other businesses.
The Malaysian government subsidises the cost of basic resources such as petrol, water and electricity. It has also capped the price of basic foods, such as chicken and rice. Although these policies have been successful in improving the lives of its citizens, they have unwittingly created practices that are often misaligned with sustainability values and principles.
Electricity, for example, is provided at 30% below the cost of production. Because electricity is so cheap, we saw first-hand how offices close their blinds and run lighting and air-conditioning all day long. The relatively low cost of cars and petrol mean that the automobile is the prevalent mode of transport at the expense of public transportation. The cheap prices of food mean that people are less inclined to pay attention to food and packaging waste.
The situation extends to the buildings and construction industry, where energy efficient designs and materials may not be properly rewarded due to the abundance of cheap energy and the insignificance of cost savings even if energy use is reduced. It becomes increasingly apparent why sustainability in the construction sector is so important for Malaysia, because every time I visit the country I can see more and more building work taking place.
The figures substantiate this. The Malaysian economy is growing quickly and this means that there is a rapid growth in infrastructure development, as demonstrated by the 4.1% expansion recorded in 2010 by the construction industry. This growth in the sector has maintained momentum throughout the Tenth Malaysia Plan (2011-2015) with the allocation of RM138 billion (approximately €35 billion) in development costs.
The continuing growth in local construction has been happening alongside a corresponding increase in demand for Malaysian building materials and equipment, both at home and abroad. To help make this growing market more sustainable, there are three main objectives to the project we have been working on:
- Produce guidelines, tools and the supporting mechanism for product footprinting and labelling that meet the needs of the local and international market;
- Create the recognition and preference for sustainable products in the Malaysian construction and building materials sector;
- Catalyse continued improvements in the sustainability and economic performance of Malaysian companies that supply materials within the construction and building sector.
This could have a serious impact on Malaysia’s potential for exports, because information on the environmental impact of products is increasingly being requested by the international customers of local companies within the construction sector. This is particularly the case within the EU, where customers are increasingly demanding information on products to measure the impacts from their supply chain, expecting action to be taken to reduce the embodied carbon in products and services that are procured.
We saw a clear example of this on the first day of our trip, meeting with a local company called Hume Cemboard Industries, a leading manufacturer of fibre cement board in Malaysia. They told us about a situation they faced where European buyers had all started requesting CO2 life cycle assessment (LCA) information on the company’s products. At the time Hume had no idea at the time where to start, or even what a carbon footprint was. It took Hume significant time and resources to get a verified environmental product declaration (EPD). But armed with this EPD, exports to Europe now make a significant portion of Hume’s business.
On this visit to Malaysia we were working on testing the new cloud-based software that has been developed for the pilot phase that is starting in March. It’s an important year to test and prove the approach we’ve designed together before launching the scheme formally in the autumn. The longer term plan is to have a footprinting and labelling scheme in Malaysia across all sectors, not just construction.
Having a labelling scheme that recognises companies’ efforts in measuring the carbon impacts of its products is an excellent place to start in aligning incentives with sustainable practices. By making sure that government policies reward sustainable efforts then this will drive better behaviour by businesses and open up export markets.
The Carbon Trust has unique experience in footprinting and labelling around the world. We were the first organisation to launch a carbon label for products and I have personally been involved in working on environmental measurement and footprinting with organisations in China, Taiwan, Mexico and Russia. With eleven companies already signed up to this construction sector pilot I have plenty of reason to be optimistic that we will be able to create a commercially sustainable and viable scheme for Malaysia.