Page 86 - SC SCAR 2023 ENGLISH Flipbook

PART 3 STRENGTHENING THE SUSTAINABILITY AND COMPETITIVENESS OF THE CAPITAL MARKET
The Joint Committee on Climate Change
The SC and BNM continue to collaborate in strengthening the financial sector’s response to climate change. As Malaysia transitions towards a low-carbon economy and a more sustainable future, it is critical that both companies and financial institutions play their part in facilitating this transition. The Joint Committee on Climate Change (JC3), through its initiatives, is actively exploring ways to assist companies to move towards a low-carbon economy in a just and orderly manner, while supporting financial institutions to accelerate capital allocation towards companies demonstrating credible climate transition pathways.
The year saw the progress of the initial green pilot projects and several capital market initiatives supported by JC3 that aim to expand sustainable and transition finance. The projects and initiatives focus on greening supply chains, scaling up green technology adoption in the agriculture sector and supporting the development of the sustainable sukuk and bond market.
The JC3 has established the SME Focus Group in 2023, focusing on enhancing awareness, facilitating green and sustainability certification, and facilitating better disclosures by SMEs. These efforts aim to ease the processes and reduce overall transition cost faced by SMEs. The establishment of the SME Focus Group is timely to ensure the backbone of the country’s economy is given special attention as their collective actions hold immense potential to shape our economic trajectory and to contribute to job creation and overall societal well-being.
Read more on media release ‘Joint Statement by Bank Negara Malaysia and Securities Commission Malaysia Updates at the 10th Joint Committee on Climate Change (JC3) Meeting’. https://www.sc.com.my/resources/media/media-release/ joint-statement-by-bank-negara-malaysia-and-securities- commission-malaysia-updates-from-the-10th-joint-committee- on-climate-change-jc3-meeting
Read more on media release ‘Joint Statement by Bank Negara Malaysia and Securities Commission Malaysia Updates at the 11th Joint Committee on Climate Change (JC3) Meeting’. https://www.sc.com.my/resources/media/media-release/ joint-statement-by-bank-negara-malaysia-and-securities- commission-malaysia-updates-from-the-11th-joint- committee-on-climate-change-jc3-meeting
Accelerating Growth of Sustainable Investments for the Capital Market
The SC issued a revised set of Guidelines on Sustainable and Responsible Investment Funds (Guidelines on SRI Funds) on 17 February 2023, which came into effect immediately upon its issuance. The revised Guidelines on SRI Funds enhances the disclosure and reporting requirements to mitigate greenwashing risk while ensuring alignment with the ASEAN Sustainable and Responsible Fund (ASEAN SRF) Standards that were issued in October 2022.
Under the revised Guidelines on SRI Funds, a qualified SRI fund or a fund seeking to qualify as an SRI fund may also seek to qualify as an ASEAN SRF if the issuer can ensure that the SRI fund complies with the ASEAN SRF Standards issued by the ASEAN Capital Markets Forum. The allignment between the Guidelines on SRI Funds and the ASEAN SRF Standards would also enable fund managers to tap into the regional pool of investors.
As at December 2023, the size of SRI funds in Malaysia is RM7.7 billion NAV made out of a total of 68 SRI funds.
Promoting sustainable investment
The SC also supported the development of several initiatives under the Perkukuh Pelaburan Rakyat (PERKUKUH) programme under the MOF, focused on promoting good governance to facilitate sustainable growth, enhance socioeconomic inclusivity, and ensure environmental sustainability. The SC, as the lead of PERKUKUH #11 WG, supported MOF in spearheading the development of the Sustainable Investing Standards (SIS), which was released on 26 May 2023, and aims to enhance the role of government-linked investment companies (GLICs) in sustainable investments, by providing guidance in incorporating sustainability considerations into the investment process.
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