KUALA LUMPUR: The Employees Provident Fund's (EPF) move to completely embrace sustainable investing and reinforce its commitment to Environmental, Social and Governance (ESG) will benefit not only the country's capital markets but also the people, Minister of Finance Tengku Datuk Seri Zafrul Aziz said.
The EPF is Malaysia's largest institutional investor and pension fund.
Driven by its commitment to two overarching sustainable investment goals of ESG compliance by 2030 and a climate-neutral portfolio by 2050, the EPF's Sustainable Investment Policy, Priority Issues Policies, and Priority Sector Policies are all steps in the right direction for its sustainable investment ambitions.
This is in addition to laying the foundations for more climate-resilient and socially responsible practices, as well as sound corporate governance, among its investee companies.
"The government believes that by institutionalising ESG policies in EPF's investments, the benefits will cascade down the value chain of Malaysia's capital markets, ultimately benefitting the Rakyat," he said.
In fact, today's pledges by all 16 of the EPF's external fund managers to incorporate ESG considerations into their investment decision-making and to collaborate with the EPF to promote the ESG agenda serve as a great starting point, the finance minister said at the launch of the EPF's sustainable investment policy.
However, while the strive is for higher standards by aligning policies with global standards or frameworks, its principles and approach must be tailored to national objectives, as well as local needs and requirements, he warned. This, he said is to ensure a fair and equitable transition that recognises each country's unique characteristics, strengths and challenges in achieving those objectives.
ESG and Labour Standards
Furthermore, as global scrutiny on labour standards gradually increases, the government is confident that the EPF's workers' wellbeing policy will further strengthen labour practices among Malaysian corporates, while also serving as a testament to the country's commitment to strive for better workers' wellbeing.
On the social front, Malaysia is facing increased scrutiny of its labour practices, particularly the treatment of foreign labour by corporate Malaysia.
Tengku Zafrul said these issues have a tangible adverse impact not only on business profitability but also on the nation's reputation as a whole. "As a result, it is undeniable that sustainable or ESG investing is becoming increasingly important, and is no longer limited to developed countries."
According to Bloomberg Intelligence, global ESG assets are on track to exceed US$53 trillion by 2025, accounting for more than a third of the projected total assets under management of US$140.5 trillion.
The rush into ESG assets is unsurprising given their expected long term outperformance. On an annualised three, five, and 10- year returns, for example, the MSCI Malaysia ESG Leaders index clearly outperformed the MSCI Malaysia Index.
In other developments, Tengku Zafrul said the Ministry of Finance (MOF) has already begun budget-tagging specific measures to ensure that various ministries spend in accordance with their sustainability expectations.
"To maintain the momentum of this mainstreaming process, institutional investors must share key data on how each industry in their ecosystem has 'shaped up' in terms of sustainability," he added.
This will enable future policies to be tweaked accordingly to improve Malaysia's climate adaptation and crisis mitigation strategies as quickly as possible.
-- BERNAMA
Bernama
Thu Mar 31 2022
The EPF is Malaysia's largest institutional investor and pension fund. - Astro AWANI
Who is Prabowo Subianto, incoming president of Indonesia?
A wealthy ex-general with ties to Indonesia's popular outgoing president and its dictatorial past, looks set to be its next leader.
Iran's supreme leader says Hamas leader's death will not halt 'Axis of Resistance'
The "Axis of Resistance", built up with years of Iranian support, includes Hamas, the Lebanese Hezbollah group, the Houthi movement in Yemen, and various Shi'ite groups in Iraq and Syria.
Putin says Russia willing to seek compromises between Iran and Israel
Russia is ready to help seek compromises between arch-foes Israel and Iran, President Vladimir Putin said on Friday, saying these would be difficult but possible.
What proposals will Russia push at the BRICS summit?
The proposal is also to establish a BRICS reinsurance company to allow uninterrupted shipment of goods and key commodities between members.
Indonesia's free meals plan in the spotlight as Prabowo readies for office
Prabowo calls the programme one of the main drivers of economic growth, eventually set to add an estimated 2.5 million jobs.
Astro AWANI's revamped English news website, AWANI International, launches on Oct 21
Astro AWANI's revamped English platform delivers in-depth global news and expert analysis to keep you informed on key developments.
Israeli strikes kill 33 people in Jabalia refugee camp in Gaza, medics say
Residents of Jabalia said Israeli tanks had reached the heart of the camp after pushing through suburbs and residential districts.
Liam Payne's ex-partner calls for media restraint after 'painful' death
Cheryl Tweedy used her statement to urge the media to remember they had a seven-year-old son, Bear, who could read the reports.
Analysts: Indonesia's strong MoF leadership team to boost investor confidence
Sri Mulyani Indrawati as head of Indonesia's Ministry of Finance is expected to instil confidence among investors.
Biden offers both a carrot and a stick to Israel as his term nears an end
Israel has frequently resisted US advice and has caused political difficulties for the Biden administration.
Putin says BRICS will generate most of global economic growth
Russian President Vladimir Putin will host a summit of the group in the city of Kazan on Oct. 22-24.
ISIS Malaysia's perspective of Budget 2025
An excellent rakyat-centric budget under the overarching principle of a caring and humane economy.
Budget 2025: Record increase in STR, SARA aid initiatives
The government will provide a significant boost to the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) initiatives next year.
Budget 2025: EPF contributions to be made mandatory for foreign workers – PM Anwar
The government plans to make it compulsory for all non-citizen workers to contribute to the Employees Provident Fund (EPF).
What policies to expect from Indonesia's new President Prabowo
Prabowo will be open to foreign investment, his aide has said, such as by offering investors management of airports and sea ports.
Budget 2025: Govt allocates RM470 mil to empower women's participation in PMKS
The Women's Leadership Apprenticeship Program will be intensified as an effort to produce more female corporate personalities.
Israel sends more troops into north Gaza, deepens raid
Residents of Jabalia in northern Gaza said Israeli tanks had reached the heart of the camp, using heavy air and ground fire.
Indonesia ramps up security ahead of Prabowo's inauguration
Prabowo Subianto will be sworn in as Indonesia's president on Sunday with Vice President-elect, Gibran Rakabuming Raka, also taking office.
Immediate allocation of RM150 mil for local authorities, DID to tackle flash floods
Datuk Seri Anwar Ibrahim said this allocation is intended to address the recent flash floods that hit the capital and several major towns.
Budget 2025: Sabah, Sarawak to continue receiving among highest allocations - PM
Sabah and Sarawak continues to be prioritised under Budget 2025, with allocations of RM6.7 billion and RM5.9 billion respectively.