KUALA LUMPUR: The capital market can play a pivotal role by facilitating funding access to support the growth of sustainability-related investment products.
Securities Commission Malaysia (SC) chairman Datuk Seri Awang Adek Hussin said one of SC’s key priorities is ensuring that the capital market is able to channel funds as well as capital towards meeting sustainability targets.
"To do so, investors and lenders will require more transparent, comparable and reliable information from companies on their sustainability journey.
"These data and information will allow investors to better price such risks and opportunities,” he said in his opening address at the Sustainable and Responsible Investment (SRI) Virtual Conference 2023, today.
Awang Adek said the International Sustainability Standards Board (ISSB) is developing a global baseline standard for sustainability disclosures, which is expected to be completed this month.
"Given the complexity and different levels of market maturity in terms of sustainability practices and reporting, it is expected that jurisdictions will be given some flexibility to set their own timeline for adoption of these disclosure standards,” he said.
From the emerging market’s perspective, he said Malaysian public-listed companies should be ahead of the curve, given their headstart in sustainability reporting since 2015, as Bursa’s sustainability reporting requirements are also in line with the ISSB standards.
"I urge companies to take immediate steps to meet the information needs of stakeholders if they have not already done so.
"The SC and Bursa will provide companies with the required support, including capacity building programmes,” he said.
Meanwhile, Awang Adek said the SRI Taxonomy for the Malaysian capital market, which was unveiled recently, is aimed at ensuring the standardisation and comparability of SRI and sustainability assets.
"We believe that this will also enhance the synergies between Islamic investing principles and SRI.
"A prime example of social finance is waqf, which is endowments or charitable trusts that can be utilised for social causes such as education, healthcare and poverty alleviation.
"Given its role in enhancing societal welfare, I would like to urge the private sector to consider this Islamic structure in promoting and satisfying its social obligations,” he said.
He added that the SC is currently working on guiding principles based on Maqasid al-Shariah (the objectives or purposes behind Islamic rulings), encompassing areas such as social finance, impact investing, SRI as well as Islamic fund and wealth management.
"We hope this will attract more interest for social finance in Malaysia, as well as better align with Islamic principles to promote socially beneficial outcomes with the overall sustainability agenda,” he said.
Themed "Revving Up the Race for Sustainability”, the fourth edition of the SRI conference is being held from June 21-22, hosted by the Securities Industry Development Corporation, the capacity-building arm of the SC.
The conference features more than 30 local and international industry leaders and experts, covering a wide range of cutting-edge sustainability topics such as ‘Sustainability by Design’ and ‘SRI Catalysing A Shared Value for Business and the Nation’. - Bernama
