Friday 29 Mar 2024
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KUALA LUMPUR (July 24): Malaysia is on track to becoming a sustainable responsible investment (SRI) hub, backed by its prominent presence in Islamic finance on a global level, according to RAM Ratings.

“The proactive efforts and strong commitment of Bank Negara Malaysia, Securities Commission Malaysia (SC) and Bursa Malaysia have paved the way for both responsible and green finance to thrive in Malaysia,” the ratings agency said in a statement today.

According to data from the SC, six SRI or green bond and sukuk programmes with a cumulative value of US$1.02 billion had been issued in less than one year between July 27, 2017 and April 27, 2018. 

“Increasingly more investors are factoring environment, social and governance (ESG) issues into their analysis as part of best practices, and this is driving demand for SRI,” said RAM Ratings deputy chief executive officer Promod Dass last week.

There have been an increase in the number of signatories to the United Nations-supported Principles for Responsible Investment (PRI), translating into a surge in assets under management to US$81.7 trillion, from US$6.5 trillion over a twelve-year period which was from 2006 to 2018, the ratings agency highlighted.

In February last year, Khazanah Nasional Bhd had become a PRI signatory, while government pension fund Kumpulan Wang Persaraan (Diperbadankan) (KWAP) signed on this year, RAM Ratings noted.

“This example of SRI market leadership may prompt other investors and institutions to follow suit,” it said.

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