Broker: Maybank Investment Bank Berhad
Date of Report: September 10, 2025

Malaysia Telcos Raise the ESG Bar: In-Depth Analysis of FY24 ESG Scores and Sector Outlook

Introduction: ESG Takes Center Stage for Malaysia Telcos

Environmental, Social, and Governance (ESG) factors have become pivotal in evaluating Malaysian telecommunications companies. The latest assessment for FY24 reveals rising ESG standards among key players, with improved disclosures and ambitious sustainability targets driving a higher industry baseline. This comprehensive analysis breaks down the latest ESG scores, financial metrics, and company-specific insights for Axiata, CelcomDigi, Maxis, Telekom Malaysia (TM), and TIME dotCom, providing investors with actionable intelligence on sector leaders and laggards.

Sector Overview: Key ESG and Financial Metrics

The ESG landscape for Malaysia telcos has shifted, with TIME dotCom emerging as a standout improver. Axiata, CelcomDigi, TM, and TIME now score above the medium threshold, while Maxis continues to trail due to limited target disclosures. TM and Axiata are highlighted as top picks, benefiting from data center growth, merger synergies, and asset monetization opportunities.

ESG Scorecard: How Malaysia Telcos Stack Up

Axiata: Group-Wide Gains and Focused Green Initiatives

Axiata has improved its ESG score to 66, up from 61, reflecting progress in emissions reduction, energy intensity, and gender representation in management. The company is also increasingly transparent about its use of renewable energy.
Key Points:

• Axiata’s Scope 2 emissions and energy intensity have decreased year-on-year.
• Female management representation rose to 30% in FY24; 36% of the Board are women, meeting the 30% target.
• Renewable energy now accounts for 2% of total usage.
• Notable carbon mitigation steps include investments in energy-efficient equipment and site electrification via grid power and renewables.
• Targets include a 42% reduction in Scope 1 and 2 emissions by 2030 (7% achieved), 25% reduction in Scope 3 by 2030, and net-zero by 2050.
• CEO remuneration is 2.5% of normalized net profit; dividend track record is average due to high capex in growth markets.

Axiata aligns its overall ESG strategy with global best practices and has established a Board Sustainability Committee. Senior management’s remuneration is tied to ESG targets, and the group follows the TCFD (Task Force on Climate-Related Financial Disclosures) framework.

CelcomDigi: Striving for Balance Amid Merger Integration

CelcomDigi’s ESG score dropped to 50 from 57, mainly due to increased emissions, higher lost time injury frequency (LTIF), and a dip in female management representation. Despite these setbacks, CelcomDigi continues to perform well in qualitative and target categories.
Key Points:

• Scope 1 and 2 emissions rose in FY24; carbon intensity per data usage improved slightly.
• Female workforce percentage stands at 48%, with 37% in management roles.
• Board gender diversity meets the 30% threshold, but independent director representation is at 40% (below majority requirement).
• Major targets include SBTi alignment by 2025 and net-zero by 2050.
• Dividend payout ratio remains near 100%.

CelcomDigi is developing its ESG strategy post-merger. The Board Governance and Risk Management Committee oversees ESG, and management’s remuneration is linked to ESG targets.

Maxis: Progress in Disclosure, But Target Clarity Needed

Maxis’ ESG score improved from 40 to 47, driven by better quantitative and qualitative disclosures, especially the addition of Scope 3 emissions reporting. However, the company still falls short in defining clear, actionable ESG targets.
Key Points:

• Scope 1 and 2 emissions, as well as energy intensity, are on a downward trend.
• Scope 3 emissions disclosure now included; qualitative score strong.
• Female representation on the Board is at 22% (short of 30% target), while 44% of senior management are women.
• CEO and key management pay as a percentage of net profit is 2.5%.
• Cited for proactive capital management, aiming to maximize dividends with a net debt/EBITDA of about 2x.
• Still lacks clear, time-bound ESG targets; improvement opportunity lies in enhanced disclosure.

Maxis has a Sustainability Steering Committee and links senior management pay to sustainability KPIs. The company follows TCFD but lacks mid/long-term ESG targets.

Telekom Malaysia (TM): Consistency and Opportunity in Fibre Transition

TM’s ESG score decreased from 65 to 57, mainly due to higher energy intensity and lower female board representation, despite strong performance in qualitative and target criteria.
Key Points:

• Scope 1 emissions fell to 8.8 ktCO2e; Scope 2 dropped to 257.8 ktCO2e in 2024.
• 21% of energy use is from renewables.
• CEO remuneration is just 0.2% of net profit.
• Female board membership is at 25%, slightly below the recommended 30%.
• Aims to reduce emissions by 45% by 2030 (30% achieved); net-zero by 2050.
• TM’s transition from copper to fibre networks is expected to further reduce carbon footprint and operating costs.
• TM’s mobile arm provided free data during the pandemic, reflecting its nation-building role.

TM has a comprehensive sustainability governance structure, with ESG KPIs for senior management and adherence to TCFD. The company owns a university and is a major national employer.

TIME dotCom: The FY24 ESG Breakout Star

TIME dotCom’s ESG score catapulted from 27 to 63, thanks to robust new disclosures and ambitious targets. The company now reports Scope 1 and 2 emissions, energy intensity, and renewable energy use, and has articulated clear reduction and net-zero goals.
Key Points:

• Scope 1 emissions at 0.5 ktCO2e, Scope 2 at 6.3 ktCO2e for 2024.
• Energy consumption intensity reduced to 4.9 MWh/MYR million revenue.
• Board gender diversity at 44%, independent directors at 67%.
• Targets a 45% emission reduction by 2030 (from 2024 baseline), net-zero by 2050.
• CEO pay is 0.5% of net profit; strong capital management with up to 50% payout policy.
• TIME’s fibre-only network and expansion into data centers position it well for sectoral ESG leadership.

TIME’s Sustainability Steering Committee oversees the ESG agenda. While the company does not yet follow TCFD or report on Scope 3 emissions, its disclosure trajectory and target clarity are now among the best in the sector.

ESG Scoring Methodology: Quantitative, Qualitative, and Target-Based

Each telco’s ESG score is calculated as a weighted average:

• Quantitative metrics (50%)
• Qualitative factors (25%)
• Target ambition and progress (25%)

A minimum score of 50 is required for an “average” ESG rating. Data unavailability, positive/negative trends, and peer comparison are incorporated into the sub-parameter scoring.

Risks and Sector Outlook

Several risk factors could impact earnings and ratings:

• Competitive pressures—such as price wars—may erode profitability.
• Regulatory developments, including changes in taxation or spectrum pricing, present ongoing risks.
• Continued improvement in ESG disclosures, particularly from laggards like Maxis, could drive further sector re-rating.

Conclusion: TM and Axiata Lead, TIME Surges, Maxis Lags on ESG

The Malaysian telco sector is making tangible strides in ESG, with TM and Axiata leading fundamentally and from an ESG perspective. TIME dotCom’s dramatic improvement in disclosures and targets sets a new benchmark for peers. Investors should monitor for further ESG target clarity, especially from Maxis, and watch for catalysts such as data center expansion and balance sheet-driven asset monetization.
For financial professionals, the sector’s evolving ESG landscape signals both opportunity and a new baseline for investment-grade governance and sustainability standards.