KUALA LUMPUR: More institutional investors have been urged to allocate their investments for sustainable and responsible investment (SRI).
Launching the SRI for the Malaysian capital market today, Finance Minister Lim Guan Eng said the roadmap would provide clarity for the industry in mobilising private investments to fund Malaysia's development and environmental commitments.
"The issuance of the Securities Commission's (SC) SRI Sukuk Framework back in 2014 has been essential in facilitating funding for green, social and sustainable projects that will eventually benefit the environment and broader society.
"The government would like to see more issuance of SRI sukuk to finance these projects," Lim told reporters at the launch here today.
The roadmap is to position Malaysia as a regional SRI centre.
Under the five-year roadmap, the SC will be guided by five overarching strategies to holistically develop a facilitative SRI ecosystem in the Malaysian capital market.
The five strategies are widening the range of SRI instruments, increasing SRI investor base, building a strong SRI issuer base, instilling strong internal governance culture and designing information architecture in the SRI ecosystem.
The SC chairman Datuk Syed Zaid Albar said sustainability is an important global agenda given the need to address real issues on the ground that are affecting society, such as the eradication of poverty, providing access to education and healthcare, and addressing climate change.
He said the Malaysian market requiresdRM45 billion to finance long-term development goals of the roadmap.
“The capital market can play a critical role to address this gap, especially in the green, social and sustainable sectors,” he added.
Towards this end, the roadmap has identified 20 strategic recommendations to drive the development of facilitative and vibrant SRI ecosystem.
The SC said one of the immediate initiatives to be rolled out under the roadmap is a revision of the SRI Sukuk Framework, which is also released today.
“The revised SRI Sukuk Framework, has expanded the list of eligible SRI project, enhanced disclosure and reporting requirements, as well as clarified the role of external reviewer,” it said.
As at October this year, there had been 10 SRI Sukuk with issuances amounting to RM4.3 billion.
These included the world’s first green SRI sukuk to finance and renewable energy project, and issuance of social sukuk to fund the development trust schools.