An assessment of Eco World Development's (ECW) ESG matters derives a score of 69 (out of 100), making its ESG rating above average.

Maybank Investment Bank (Maybank IB) said today that ECW has relatively better disclosures compared to its peers especially on GHG emissions reporting.

It aims to achieve Net Zero emissions by 2050

Maybank IB maintains their earnings forecasts, MYR1.96 TP and BUY rating on ECW.

Maybank IB's assessment is based on disclosures in ECW's FY23 Sustainability and Corporate Governance Reports.

ECW's overall ESG score of 69 is above average, which is close to its sector peer, Sime Darby Property (SDPR MK, BUY, CP: MYR1.45, TP: MYR1.40) at 63.

ECW's score would have been higher if not for the rising trend in its energy and waste intensity and a lower percentage of independent directors on its Board at 55% (FY22: 58%) following the retirement of two independent directors in FY23.

Targeting Net Zero emissions by 2050

ECW has relatively better disclosures, especially on GHG emissions reporting, as compared to the other property developers under our coverage. It has clearly stated its medium-term GHG emission targets in FY23.

In FY23, ECW developed its Net Zero 2050 Roadmap and introduced a group-wide target to reduce Scope 2 GHG emissions by 20% by 2025 and 30% by 2030, compared to FY19 baseline of 6,976 tCO2e.

The sector leader

Maybank IB continues to like ECW for its hands-on management, proven track record (in term of sales and product creativity) and healthy balance sheet (0.24x net gearing in end-2QFY24).

Its ability to secure Microsoft for its upcoming Eco Business Park VI (via a MYR402m land sale) is testament to management's capability.

Backed by a healthy balance sheet, ECW is looking to pay at least 6sen DPS in FY24E (4% yield). Meanwhile, ECW is actively seeking new landbank opportunities, Maybank IB added.