Malaysia champions sustainable and responsible investing

Source: SC. Experts and stakeholders giving local perspectives on environmental, social and governance practices at Responsible Investment Forum in Kuala Lumpur, Malaysia, co-hosted by Securities Commission Malaysia and Bursa Malaysia. From left, moderator Martin Skancke, Chair, PRI; Yew Yee Tee, Chief Regulatory Officer, Bursa Malaysia; Zainal Izlan Zainal Abidin, MD, Development & Islamic Markets, SC; Ahmad Zulqarnain Onn, Head of Strategy & Executive Director for Investments, Khazanah Nasional; and Promod Dass, Deputy CEO, RAM Ratings.

Malaysia is taking the lead in promoting the sustainable and responsible investing (SRI) proposition based on its shared values with Islamic finance. As part of initiatives to generate greater awareness on responsible investing, Securities Commission Malaysia (SC) and Bursa Malaysia co-hosted the Principles for Responsible Investment-organised Responsible Investment Forum on 14 July in Kuala Lumpur.

Global SRI assets increased 25% over the two years from 2014 to 2016 to US$22.9 trillion. The Global Sustainable Investment Review 2016 reported that Malaysia with 30% share in Asia (excluding Japan) is the largest SRI market in the region, as it recognises shari'ah-compliant funds as part of the SRI universe.

Speaking at the forum, Zainal Izlan Zainal Abidin, MD, Development & Islamic Markets of SC said, “The increasing awareness and demand for sustainable and responsible investing globally is creating significant opportunities for further growth of Islamic finance, in view of the commonalities in the principles and values underlying both segments.

“SC continues to facilitate development of products and services that meet the requirements of both SRI and Islamic finance to ensure the capital market serves the needs of investors and issuers.”

Malaysia pioneered the development of shari'ah-compliant SRI through the formulation of the SRI sukuk framework by the SC in 2014. The SC is currently developing a framework for SRI investment funds and these initiatives are part of SC’s developmental agenda to facilitate the creation of an ecosystem conducive for SRI stakeholders.

The push towards SRI has also been championed by Bursa Malaysia. It launched the FTSE4Good Bursa Malaysia Index in December 2014 that is aimed at profiling companies with good environmental, social and governance (ESG) practices. The internationally-benchmarked FTSE4Good Bursa Malaysia Index was the first ESG index to be launched in Asia and has grown from the initial 24 constituents to 43, a testimony of the continued growth of ESG practices among corporates in Malaysia.

Bursa Malaysia CEO Datuk Seri Tajuddin Atan said, “Bursa Malaysia believes that there is a strong value proposition for companies to adopt, practice and report on sustainability in a meaningful manner. By placing sustainability at the core of the market, Bursa Malaysia sets to enable a win-win situation for key players across the value chain, especially for our listed issuers and investors.”

Martin Skancke, PRI Board Chair, who delivered the keynote at the forum, commented, “With interest in ESG growing rapidly, the event provided an opportunity for investors to build their knowledge and awareness of responsible investment, and to explore drivers, trends and practices.” He added, “The PRI’s core mission is to promote responsible investing and encourage more widespread ESG integration. It is vital that investors become active owners across all the asset classes in which they invest.”

BNP Paribas-INCEIF CIWM co-launch booklet on socially responsible investing

Source: INCEIF. From left: INCEIF Deputy President (Academic), Professor Datuk Syed Othman Alhabshi, BNP Paribas Malaysia chairman Dato’ Abdullah Mat Noh and Director of the MIFC Promotion Unit Nik Mohd Din at the launch of the SRI booklet during the Managing Risks in Islamic Finance Industry symposium organised by CIWM.

The BNP Paribas – INCEIF Centre for Islamic Wealth Management (CIWM) has launched a booklet about socially responsible investing (SRI) titled SRI (Sustainable Responsible and Impactful) & the Case for Islamic Funds. The SRI booklet is a joint effort between CIWM and the Malaysian International Islamic Financial Centre (MIFC) to raise awareness on the inextricable link between sustainable and shari'ah compliant investments. 

The booklet has three sections: 

Foundation and growth of investing through principles
Investors' increasing attraction for the SRIs
The case of emerging markets, Islamic investments and the Malaysian option

The key objective of this publication is to create awareness on shared SRI and Islamic finance value propositions and develop a global interest for SRI sukuk. It also seeks to support business engagements in securing SRI mandates and environmental, social and governance-based business. 

Islamic finance can complement shift towards sustainable and responsible investments

Source: Securities Industry Development Corporation. Zainal Izlan Zainal Abidin,
Executive Director, Islamic Capital Market Business Group,
Securities Commission presenting his opening remarks
at the Islamic Markets Programme 2014.

The Securities Commission Malaysia (SC) and its training and development arm, the Securities Industry Development Corporation (SIDC), hosted the 9th Annual Islamic Markets Programme (IMP) themed 'Strengthening the Wellbeing of Societies' from 11 to 14 August 2014 in Kuala Lumpur, Malaysia, and saw 48 Islamic finance regulators, experts and practitioners from eight countries discuss the evolving role of Islamic finance in enhancing the wellbeing of societies and what it will take to ensure sustainable development of global Islamic finance. 

Speaking at the opening of the programme, Zainal Izlan Zainal Abidin, Executive Director, Islamic Capital Market Business Group at the SC said, “The Islamic capital market may seek to capitalise on a growing shift in preference especially in the developed markets towards sustainable and responsible investments, or SRI. 

"Islamic finance and SRI share similar underlying principles which suggest that the current significant growth of the SRI market can also potentially benefit the Islamic finance industry. The greater awareness as well as demand for social responsibility in conducting business is driving the growth of the SRI segment, and Islamic finance - which places similarly strong emphasis on preserving commercial and social balance - can offer a distinctive value proposition for global investors.”

The IMP is an established annual international platform for global subject matter experts, regulators and industry players to share information and insights on Islamic finance topics ranging from product innovation, human capital development and interpretation of shari'ah principles to issues of ethics and governance. 

First organised in 2006 with the objective of developing a talent pool and promoting knowledge sharing in the Islamic capital market, the IMP has hosted 401 participants from 38 countries to date and is an integral part of Malaysia’s strategy to become a recognised Islamic financial centre of excellence. This year’s event welcomed the first participants from Kuwait, Oman and Russia.