KUALA LUMPUR (June 24): The Securities Commission Malaysia (SC) plans to release a public consultation paper on sustainable and responsible investment (SRI) taxonomy by year end to provide more clarity and guidance in identifying sustainable investment assets or activities.
SC chairman Datuk Syed Zaid Albar said the commission is currently in discussion with key industry stakeholders on guiding principles for SRI taxonomy.
“We have identified SRI taxonomy for the capital market as a critical building block to facilitate greater product diversity and accelerate the development of SRI as an asset class.
“We are also working with market participants to assess the benefits of positive screening that incorporates syariah requirements with environmental, social and governance (ESG) standards,” he said in his keynote address at the Joint Committee on Climate Change (JC3) Flagship Conference today.
According to Syed Zainal, to date, 64% of SRI sukuk issuances are for renewable energy projects.
“We need to expand this base by targeting transformative technologies and industries with high spillover benefits for the country,” he added.
In supporting the sustainable agenda in the region, Syed Zainal noted that the SC is involved in two key initiatives through the ASEAN Capital Markets Forum, namely the ASEAN Taxonomy for Sustainable Finance and the ASEAN Sustainability-linked Bond Standards.
“The ASEAN Taxonomy for Sustainable Finance also involves Bank Negara Malaysia (BNM), and it seeks to identify economic activities that are sustainable, and helps direct investments and funding towards a more sustainable region.
“Meanwhile, the ASEAN Sustainability-linked Bond Standards provides an avenue for issuers to raise funds to meet sustainability targets,” he added.
