KUALA LUMPUR (Nov 2): Bursa Malaysia Bhd has inked a memorandum of understanding (MOU) with the London Stock Exchange Group (LSEG) to expand environmental, social and governance (ESG) collaboration between the two exchanges as well as explore new areas of opportunity.

Under the MOU terms, Bursa Malaysia and FTSE Russell, LSEG’s global multi-asset index and benchmark provider, would expand their coverage of ESG scores to include all public limited companies (PLCs) listed on the Main and ACE Markets.

Currently, ESG scores are only available for PLCs that are part of the FTSE Bursa Malaysia EMAS Index, which account for 30% of total Malaysian PLCs.

This expanded coverage will enable more PLCs to better measure their ESG performance, Bursa Malaysia said in a statement.

The MOU will also see Bursa Malaysia and LSEG collaborate on ESG educational initiatives, support the implementation of sustainable supply chain finance and transition financing workflows among financial institutions.

It will also see the two parties explore corporate ESG reporting solutions that are aligned with internationally recognised standards such as the Task Force on Climate-Related Financial Disclosures.

Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift said the signing of the MOU signifies another important step in the exchange’s efforts to facilitate greater quality of ESG disclosures among Malaysian PLCs, which is in line with the exchange’s aspiration to elevate them as regional leaders in the ESG space.

“We have been working with LSEG to build a stronger suite of ESG products. Following the launch of the FTSE Bursa Malaysia Top 100 ESG Low Carbon Select Index Series in August this year, this MOU we are signing is an extension of our partnership, and we hope that it will bring more successes to our institutions.

“We believe that the outcome of this MOU will result in improved performance and stature of our PLCs, as well as sustained investor interest in our capital market, benefiting Malaysia's economic growth overall,” he added.

LSEG sustainable finance and investment group leader Cornelia Andersson said the agreement with its long-term partners Bursa Malaysia will yield a significant increase in the ESG data and analytics available on listed companies in Malaysia.

“We are also exploring the development of an ESG corporate reporting solution to increase disclosure of climate-related risks and opportunities for investors. It follows the launch of a new ESG and low carbon benchmark covering the largest listed issuers on the exchange,” she said.

Bursa Malaysia’s share price finished two sen or 0.31% higher at RM6.42, bringing the group a market capitalisation of RM5.2 billion.