KUALA LUMPUR (April 8): The Employees Provident Fund (EPF) announced today that it has signed the United Nations-supported Principles for Responsible Investment (UN-suported PRI), under which it has pledged its commitment towards environment, social and governance (ESG) best practices and sustainable investing principles.
Signatories are required to implement the six Principles for Responsible Investment, which include embedding ESG considerations into investment analysis and decision-making processes, as well as seeking appropriate ESG disclosures from investee companies.
“As the EPF progresses towards becoming a trillion ringgit fund, we recognise that aligning our investment activities with the broader interests of society would bode well with our objectives as a retirement savings fund,” EPF Chief Executive Officer Tunku Alizakri Alias said in a statement today.
He said the fund believes the upholding of ESG best-practices can affect the performance of investment portfolios to varying degrees across companies, sectors and regions. "We hope to meaningfully incorporate ESG factors into our investment due diligence and decision-making process, given its potential to enhance return while reinforcing our existing risk management framework,” Alizakri added.
He said this would improve EPF’s ability to balance financial returns with measurable impact towards society and the environment for the benefit of future generations.
“While financial considerations remain paramount, we need to account for the larger ramifications of our activities on society, emphasising what is good and right, while minimising the negatives," he added.
The EPF said it has traditionally been a socially-conscious investor in excluding companies that are seen as unethical such as alcohol, tobacco, gambling, weaponry and nuclear power.
"Today’s announcement will see the EPF reinforcing its commitment towards ESG and sustainable investing principles, laying the foundations for stronger environmentally-friendly and socially-conscious practices, on top of sound corporate governance among its investee companies," the fund added.