There may be opportunities to integrate impact assessments with Islamic social finance instruments which will enable investors to measure whether the capital invested has achieved its desired outcome, executive chairman of SC Datuk Syed Zaid Albar said at the Virtual Islamic Capital Market Summit.
He said that Impact investing is another model that Islamic markets can potentially expand on as it is a natural fit with Islam’s views on the nobility of doing permissible business and returning profits back to society.
While ESG seeks to identify non-financial risks that 5 may impact the valuation of a company, impact investing on the other hand seeks to make a measurable, positive environmental or social impact,” he said at the “Connecting Islamic Market To A Sustainable Future” summit.
He said that this entails knowledge sharing, research capabilities, and coordination with impact stakeholders through a facilitative regulatory and developmental environment for social finance innovation. “Structured platforms for collaboration are another avenue to enable the impact investment ecosystem to progress,” he said.
SC’s extensive network of both domestic and regional stakeholders can be leveraged to achieve this. ‘We can then harness our collaborative efforts to develop thought-leadership capabilities in sustainable finance, cater to regional capacity building needs, champion innovation and research, and guide the broader economy on a path of long term value creation,” he said.
As part of its efforts to promote economic recovery and financial inclusion, he said that the SC has taken steps to empower investors through a variety of strategies, one of which is to widen investment options through accessible and high-quality investment advice.
This, he said is addressed using robo-advisers or digital investment managers or DIM in short. Since the introduction of the DIM framework in 2017, and the issuance of the first Islamic DIM licence in 2019 – DIM entrants have contributed significantly to the growth of AUM. There are currently eight licensed DIMs, one of which offers dedicated Islamic fund management services.
“Collectively, they manage an estimated 16 billion Ringgit of funds. This year, the eight licensed DIM holders have opened 90 percent5 more DIM accounts compared to last year,” he said.