SRI hub role seen for Malaysia

Kuala Lumpur: The Securities Commission (SC) envisions Malaysia transforming into a regional Sustainable and Responsible Investment (SRI) hub that aligns with the Islamic Capital Market (ICM) agenda to establish Malaysia as a regional centre for Shariah-compliant SRI.

The capital market regulator said this was following the continued growth of the Malaysian capital market with emerging global and regional SRI needs.

“By leveraging the SC’s extensive collaboration network and bringing more domestic and regional stakeholders together, efforts will be made to develop thought leadership in sustainable finance, cater to regional capacity-building needs as well as champion innovation and research, while bringing the broader economy along a journey of long-term value creation.

“In addition, Malaysia seeks to attract global investments by leveraging its position as having an ever-growing list of Shariah and environmental, social and governance (ESG)-compliant companies, SRI funds and SRI sukuk,” the SC said in its Capital Market Masterplan 3 (CMP3) report Tuesday.

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It said the SRI landscape in Malaysia is rapidly evolving, even as nascent areas such as transition finance, performance-linked SRI instruments and taxonomies are being deliberated and developed.

“In such an environment, collaboration and innovation are key to remain in the forefront of development in the SRI space while bringing the broader economy along the journey,” it said.

It said many jurisdictions have adopted a multi-stakeholder approach to facilitate innovation in their markets.

“In some jurisdictions, for example, the government, industry practitioners, academia and non-profit sectors have come together to develop capabilities in research, product development and technology innovation to enable the country to drive green finance and investment as a global centre,” it said.

The SC said in Malaysia, several Centre of Excellence have been established by SC’s affiliate, the Capital Markets Malaysia (CMM), such as the Malaysian Sustainable Finance Initiative to build capabilities of intermediaries in sustainable finance, the Centre for Sustainable Corporations to build up capabilities for sustainable practices among private sector companies and the Sustainable Investment Platform to promote sustainable investment strategies among investors.

It said besides these, the SC has collaborated with Bank Negara Malaysia to set up Joint Committee on Climate Change, in partnership with Bursa Malaysia and the industry, to further climate action within Malaysia’s financial sector.

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“Additionally, the SC also plays a significant role in driving the development of sustainable finance on the regional front through the Asean Capital Markets Forum and the Asean Working Committee on Capital Market Development.

“Internationally, the SC participates actively in IOSCO’s (International Organisation of Securities Commissions) sustainable finance initiatives, including managing capacity-building efforts through the IOSCO Asia Pacific Hub based in Malaysia,” it added.

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