Malaysia records 68 sustainable, responsible funds worth RM8bil
Published on: Tuesday, March 05, 2024
By: Bernama
The industry is expecting institutional investors to drive responsible and sustainable value creation in companies, said the Securities Commission. (Photo: Freepik via FMT)
PETALING JAYA: Securities Commission Malaysia (SC) announced that there were 68 sustainable and responsible investment (SRI) funds with a total size of RM7.7 billion in Malaysia as of Dec 31, 2023.
Chairman Awang Adek Hussin said companies and investors are becoming more comfortable with sustainability as an investment approach and they are seeing demand for it.
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“Globally, trillions of dollars have flowed into funds that tout their environmental, social and governance (ESG) credits.
“With the amounts rising, there is also growing concern about greenwashing, greenhushing and green bleaching,” he said at the Institutional Investors Council Malaysia-Securities Industry Development Corporation (IIC-SIDC) Corporate Governance Conference 2024 today.
In his opening address at the conference, Awang said the International Organisation of Securities Commissions highlighted that greenwashing remains a fundamental market conduct concern that poses risks to both investor protection and market integrity.
He said greenwashing could undermine the fundamental trust in sustainable finance.
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“If investors lose trust, the financing required for a just transition can be dissipated,” he said.
Awang also emphasised the importance of good governance and that governance failure can have a wide-reaching impact beyond financial losses.
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He said the industry expects institutional investors to play a greater role in driving responsible and sustainable value creation in companies.
He noted that in 2023, close to 70% of public limited companies (PLCs) reported that the performance evaluations of the board and senior management included an assessment of how well they were managing the company’s sustainability risks and opportunities.
From a policymaker standpoint, he said the SC continues to enable stewardship by investors through, among others, ensuring that there is reliable and comparable information on material sustainability matters.
Awang added that the total assets under the control of government-linked investment companies (GLICs) in Malaysia are estimated at RM1.87 trillion, making GLICs among the main pillars of the country’s socioeconomic development.
“If the stewardship by asset owners and managers can be scaled up, the benefits to investors and the wider society will certainly increase,” he added.
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