More companies stepping up sustainability efforts, says Bursa Malaysia

KUALA LUMPUR: More companies are joining forces and stepping up sustainability efforts in areas such as renewable energy, human rights protection and supply chains, says Bursa Malaysia.

Chief executive officer (CEO) Datuk Seri Tajuddin Atan said many businesses, investors and governments had also made enormous progress towards addressing sustainability risks, while capitalising on available opportunities.

“There is a growing consensus amongst investors that sustainability or environmental, social and governance ( ESG) factors will translate into higher investment returns, and integrating non- financial considerations forms part of their fiduciary duties,” he said at the Sustainability Forum for Directors/CEOs yesterday.

Tajuddin said institutional investors such as the Employees Provident Fund ( EPF) and Retirement Fund Inc had stated their commitment to consider ESG factors as part of their investment decision making process.

On Bursa Malaysia, he said the stock exchange operator had placed sustainability at the core of the Malaysian capital market.

“We remain mindful of the need for sustainable, innovative and forward looking solutions to maintain the competitiveness and attractiveness of our market,” he added.

Tajuddin said as part of Bursa Malaysia’s commitment to elevate the quality of sustainability practices and disclosures of local public listed companies’, it introduced in 2014, the FTSE4GOOD Bursa Malaysia Index, also dubbed the ESG Index.

“It supports investors in making responsible investments in Malaysian public listed companies,” he said.

Bursa Malaysia has also introduced the Sustainability Framework and Toolkits in 2015 with the core objective of bringing about a higher level of consciousness and integration of sustainability considerations into the business of local public listed companies, leading to better business and financial performance.

“Companies with a market capital of RM2 billion and above with financial years ending Dec 31, 2016, will commence reporting under the new Sustainability Framework this year,” said Tajuddin.

He also emphasised the importance of the board of directors of public listed companies in fostering the culture of sustainability and to view it from the perspective of the value brought on by the adoption of good practices related to it.

“There is a strong value proposition for companies to embed sustainability, not only from a risk management perspective, but as part of a cog in the wheel of progress in moving towards the future,” he said.

Organised by Bursa Malaysia and themed, “The Velocity of Global Change and Sustainability - The New Business Model”, the forum today discussed the development of sustainability business, locally and internationally.