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Trying to Make Sense Bursa Investments

Author: Ben Tan   |   Latest post: Fri, 4 Jun 2021, 12:59 PM

 

Top Glove and the World of ESG

Author:   |    Publish date:


Update: You can read the full Impactt report here.

As the quarterly reports of Hartalega and Supermax are expected to be released this week (or next week), I was planning on writing a very different gloves-related article today. However, Top Glove surprised me pleasantly by announcing that they have gotten a confirmation on scoring all "A"s in the latest forced labor indicators report prepared by Impactt. You can read their official press release here.

As can be seen, there has been a dramatic improvement in the situation at the company, which will likely help with their ESG scores as well - something international institutions are paying continuously more attention to. The MSCI rating of the company is BB, or at the lower end of average - not perfect (see here). The company also scores 26.1 (classified as medium risk) in the Sustainalytics ratings (see here). Here is how that compares to other glove manufacturers:

Company MSCI Rating Sustainalytics Rating
Hartalega AA (leader) 17.4 (low risk)
Supermax AA (leader) -
Kossan A (average) -
Intco BB (average) -
Ansell - 18.0 (low risk)

Thus, the company certainly has more to do in regards with ESG-related matters. However, as far as the reasons for the previous CBP ban are concerned, it seems like the issues have been resolved. The fact that the management has taken proactive measures to resolve all of the outstanding matters within a month is commendable. This is what I was hoping to see when I wrote this post.

However, as a person interested in seeing Malaysia and Malaysian business do well in general, I cannot help but be concerned. As I mentioned in my earlier post, many of the issues related to Top Glove's ban do not appear to be specific and isolated to the company. Withhold release orders on US imports have been placed on subsidiaries of two other Malaysian companies within the past 1 year. While Top Glove, and potentially other glove companies, currently have the financial capabilities to resolve these matters, that might prove a taller order for some other labor-intensive, export-oriented industries in the country, which could see whole sectors with systemic importance to the economy struggle for a prolonged period of time. I truly hope (probably against hope) this scenario doesn't materialize.

Important disclaimer: Any views expressed are for informational and discussion purposes only. None of this information is intended as, and must not be understood as, a source of advice. It is imperative that you always do your own research and that you make any decisions based on your personal situation and your own personal understanding.

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Labels: TOPGLOV

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Chart Stock Name Last Change Volume 
TOPGLOV 4.72 -0.08 (1.67%) 16,441,100 

  7 people like this.
 
gohkimhock only words that coming out from the mouth of US relevant authorities have weight. Other than that, all is just 卖花赞花香
26/04/2021 9:09 PM
gohkimhock what about the issue of firing of the whistle-blower? Does TopGlove still have the whistle blowing policy or not?
26/04/2021 9:11 PM
Foker Wtf? Supermax higher than Kossan and on par with Harta? Isn't Supermax accused of forced labor?
26/04/2021 9:29 PM
zzzz52 thx @Ben for the nice write up. Always appreciate your efforts
26/04/2021 11:38 PM
Ben Tan gohkimhock, Foker, zzzz52, thank you for your comments.

gohkimhock your question is answered in the report by Impactt I linked to in the article.

Foker, in some of the recent media reports, all of the companies with operations in Malaysia (including Ansell) I have mentioned in the article above, were given as examples of having labour issues.
27/04/2021 8:37 AM
Brutus @Ben Tan, as always, excellent written material! Keep it up!
27/04/2021 8:40 AM
dusti HI BEN, I SURE HOPE YOU ARE SPOT ON. BUT UNTIL THE FAT LADY SAYS SO NOTHING MAY BE VALID, BUT LETS HOPE THE MARKET WILL GIVE THE RIGHT SIGNAL.
MANY ,MANY COMPANIES IN MANY COUNTRIES FACE THE SAME PREDICAMENT AS TOP GLOVE. I HOPE THEY WILL OVERCOME THE POLITICAL BLACKMAIL. MUST SEE THE SITUATION IN USA IN THE FRUIT GROWING STATES,
“LAGI SUSAH!”
CHEERS
27/04/2021 9:11 AM
speakup guess the USA see Top Glove put their workers in shabby huts, but Hartalega put their workers in 5 star condos.
LOL!
27/04/2021 9:31 PM
speakup the truth is most of our plantation and construction companies have far far worse ESG than Top Glove, yet the USA is very silent on them.
27/04/2021 9:33 PM


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