Petronas Chemicals Group Bhd (PetChem) has been assigned an updated ESG score of 65 out of 100, reflecting an above-average performance, though this represents a slight decline from the previous year's rating of 69.

Maybank Investment Bank Bhd (Maybank IB) maintains its SELL call on the company, with an unchanged target price of RM4.18. This target is based on a forecasted price-to-earnings ratio of 15 times for the financial year of 2025 estimated (FY25E), adjusted to reflect the challenging outlook for polymer prices in the foreseeable future.

In terms of environmental performance, PetChem reported a reduction in greenhouse gas emissions, achieving a total of 7.34 million tonnes of carbon dioxide equivalent (tCO2e) in FY23, down from 7.46 million tCO2e in FY21 and 7.43 million tCO2e in FY22.

However, the greenhouse gas intensity saw a slight increase to 0.71 tCO2e per tonne in FY23 from 0.69 tCO2e per tonne in FY22. Improvements were noted in water consumption intensity, which decreased to 5.5 cubic metres per tonne, and energy intensity, which fell to 16.84 gigajoules per tonne.

On the social front, PetChem experienced a minor decrease in the representation of women in its workforce, dropping to 21.0% from 21.6% in FY22. However, the company saw an increase in the percentage of women in senior management roles, rising to 30.8% from 25.0%. Additionally, the average training per employee improved to 11.1 days from 10.2 days in the previous fiscal year, while the lost time injury frequency (LTIF) rate improved to 0.09, down from 0.17.

Despite these advancements, concerns have arisen over the company's lack of disclosure regarding Scope 3 emissions in both FY22 and FY23. PetChem continues to target net-zero carbon emissions by 2050 and adheres to the Task Force on Climate-related Financial Disclosures (TCFD) framework for ESG reporting. Since FY21, sustainability key performance indicators have been integrated into the performance appraisals of top management.