RAM Sustainability: Markets more sensitive to ESG risks

KUALA LUMPUR: Responsible finance will be a catalyst for Malaysian companies to adopt sustainable business practices and transition into climate-friendly sectors and pioneer green technologies, RAM Sustainability says.

“The equity, bond and banking markets are now more sensitive to environmental, social and governance (ESG) risks. They are shifting away from businesses that are harming biodiversity or contributing to climate change, ” according RAM Sustainability chief executive officer, Promod Dass.

The formation of the joint committee on climate change on Sept 27 by Bank Negara and Securities Commission (SC) was a clear signal that sustainable finance was here to stay, and Malaysian corporates need to adapt quickly.

Promod was speaking at the SC’S workshop on “Addressing climate change through capital markets” at Bank Negara’s regional conference on climate change.

Malaysia’s strategic investment fund (Khazanah Nasional Bhd), the government pension fund (KWAP), the Employees Provident Fund (EPF) and BIMB Investment Management Berhad are all PRI signatories.

The SC’S emphasis on green bonds and its sustainable responsible investment (SRI) Sukuk framework, combined with Bank Negara’s value-based intermediation through Islamic banks, have positioned Malaysia well on a global scale, said Promod, who is also the deputy group CEO of RAM Holdings Bhd.

RAM Group is an active contributor to sustainability and global green finance development.

On May 26, 2016, RAM Ratings joined the global line-up of six pioneer credit rating agency signatories to the PRI’S Statement on ESG in Credit Ratings.

In September 2019, Edra Solar Sdn Bhd’s proposed RM245 mil Asean sustainability SRI sukuk was assigned a credit rating by RAM Ratings, together with environmental/ social benefit ratings from RAM Sustainability. This distinctive feature renders Edra Solar’s sukuk a pioneer in Malaysian sustainability sukuk.

This year, RAM Ratings rated the world’s first mini-hydro green sukuk by Telekosang Hydro One Sdn Bhd, which also received a second opinion from RAM Sustainability.