The Securities Commission Malaysia (SC) today released the Sustainable and Responsible Investment Roadmap for the Malaysian Capital Market (SRI Roadmap) which aims to create a facilitative SRI ecosystem and chart the role of the capital market in driving Malaysia’s sustainable development.
“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,” said Datuk Syed Zaid Albar, Chairman of the SC.
It is estimated that in the next ten years, the world needs about USD5 to 7 trillion every year to fund the United Nation’s Sustainable Development Goals while in Malaysia, it is projected that in the next five years, the market will require RM45 billion to finance the long-term development goals.
“The capital market can play a critical role to address this gap especially in the green, social and sustainable sectors,” added Datuk Syed Zaid Albar.
Towards this end, the five-year SRI Roadmap has identified 20 strategic recommendations to drive the development of a facilitative and vibrant SRI ecosystem and position Malaysia as a SRI centre in the region. These include widening the range of SRI instruments, increasing SRI investor base, building a strong SRI issuer base, instilling strong internal governance culture, and designing an information architecture in the SRI ecosystem.
The SRI Roadmap builds on the SC’s initiatives to strengthen Malaysia’s position as a regional leader in sustainable investment, which includes the SRI Sukuk Framework, first introduced in 2014 to facilitate the financing of initiatives that benefit the environment and society.
One of the immediate initiatives to be rolled out under the SRI Roadmap is a revision of the SC’s SRI Sukuk Framework, which is concurrently released today. The revised SRI Sukuk Framework has expanded the list of eligible SRI projects, enhanced disclosure and reporting requirements, and clarified the role of external reviewer. The SC also released a booklet to guide stakeholders and members of the public on the key features of the revised framework.
As at October this year, cumulatively, there have been 10 SRI sukuk with total issuances amounting to RM4.3 billion. These include the world’s first green SRI sukuk to finance a renewable energy project, and an issuance of social sukuk to fund the development of trust schools.