The Securities Commission Malaysia (SC) today announced that Malaysia has recorded 68 Sustainable and Responsible Investment (SRI) funds totaling RM7.7 billion as of December 31, 2023.
Its Chairman, Datuk Seri Dr. Awang Adek Hussin, said companies and investors are increasingly opting for sustainability as their investment approach due to growing demand for it.
“At the global level, trillions of dollars have flowed into funds that publicise their environmental, social, and governance (ESG) approaches.
“With the increasing amount, there are also concerns about the occurrence of ‘greenwashing’ (manipulating environmentally friendly product information), ‘greenhushing’ (hiding ESG qualifications), and ‘green bleaching’ (underestimating fund sustainability qualifications),” he said at the Corporate Governance Conference of the Malaysian Institutional Investors Council (IIC-SIDC) 2024, here, today.
In his keynote address at the conference, Awang Adek said the International Organisation of Securities Commissions highlighted that ‘greenwashing’ continues to be a concern in the market that can pose risks to investor protection and market integrity.
He said ‘greenwashing’ could undermine confidence in sustainable finance.
“If investors lose confidence, it can affect the financing needed for a fair transition,” he said.
Awang Adek also emphasised the importance of good governance, stating that governance failures can have wide-ranging effects beyond financial losses.
He said the industry expects institutional investors to play a larger role in driving responsible and sustainable value creation in companies.
According to him, in 2023, nearly 70 percent of public listed companies (PLCs) reported that board and senior management performance assessments, including assessments of how they manage company sustainability risks and opportunities, were included.
From a policy perspective, he said SC continues to enable investor oversight by ensuring reliable information on sustainability, among others.
Awang Adek said the total assets under control of government-linked investment companies (GLICs) in Malaysia are estimated to amount to RM1.87 trillion, making GLICs one of the main pillars of the country’s socioeconomic development.
“If oversight by owners and asset managers can be enhanced, the benefits to investors and society will surely increase,” he said.
