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Bursa Malaysia Berhad (“Bursa Malaysia” or “the Exchange”), welcomed senior members of the World Federation of Exchanges (“WFE”), global capital market thought leaders and ASEAN corporate leaders to Kuala Lumpur for a two-day engagement this week, culminating in the first of the ASEAN CAP10 Sustainability Series of events in Kuala Lumpur. The aim of this series of events is to help plot a roadmap for an ASEAN sustainable exchange initiative, which Bursa Malaysia is championing in support of the ASEAN Economic Community (“AEC”) 2015.
With over 70 public listed companies in attendance the Exchange brought together a vibrant mix of capital market thought leaders from around the world for a lively dialogue at the “Global Sustainability and Impact Investing Forum”, focused on the role of exchanges in building a globally equivalent sustainable marketplace and fostering the continued worldwide growth of Impact Investing. Organised in partnership with WFE, the forum followed the WFE Working Committee Meeting that was held here in Kuala Lumpur on Wednesday.
Dato’ Tajuddin Atan, Chief Executive Officer of Bursa Malaysia said, “As exchanges, we have a responsibility to ensure the sustainable competitiveness of our marketplace. One of the current universal conversations globally is sustainability and the transformative power and opportunities of impact investing and sustainable practices. This conversation will be central throughout our sustainability series forums.”
He added, “The Environment, Social and Governance (“ESG”) proposition is well understood in developed markets, as evidenced by the dramatic rise in global sustainable and responsible investment (“SRI”) assets, from USD 13.3 trillion in 2012 to USD 21.4 trillion at the start of 20141. It is therefore imperative that we, as an emerging market, seize this opportunity to continue on our path to greater integration of our ESG policies – and help our listed companies cope with the further global advance of impact investment in coming years.”
Bursa Malaysia is proud to have introduced Asia’s first exchange driven, globally benchmarked ESG Index and shortly after, the country’s first ESG fund. The ESG Index is a step towards leveling the playing field in the global marketplace and elevating the visibility of Bursa Malaysia’s listed companies.
Nandini Sukumar, CEO of WFE, highlighted the results of a survey of leading exchange members of the group during her speech at the event.
“World Exchanges (WFE members) represent a total global market capitalisation of USD64.7 trillion and a total trading value of USD 60 trillion2. So WFE members have a vital role in helping their listed constituents discover and adopt best practice in the important field of impact investment. WFE is working hard to do its part to ensure there is a globally consistent approach for investors.”
Echoing Dato’ Tajuddin’s comments, Nandini stated, “We are seeing rapid uptake in investor interest for impact investing, particularly amongst progressive fund managers. These investors are making a statement, and that statement is for the sustainability of our markets. They are also beginning to look more and more towards emerging markets, where they believe they can have a bigger impact with their investments. ESG provides a common sustainable framework allowing them to make that choice globally.”
At least 22 sustainability and ESG related indices have been launched by WFE members, as exchanges respond to growing investor demand. Four new ESG indices were launched in 2014 and five exchanges are seeking to launch an ESG index.
“Bursa Malaysia has the unique advantage of having a large influx of millennials into the workforce who desire to make a good return and also a positive impact with their investments. We see sustainability as a journey of necessity to be the good global citizen we desire to be as a leading emerging market exchange. The FTSE4Good Bursa Malaysia Index or ESG index has positioned us on the global stage and we will continue to set a high bar for such practices with ESG as the foundation to grow our marketplace to the next level,” Dato’ Tajuddin concluded.
In 2006, Bursa Malaysia implemented the Corporate Governance framework which helped set the stage to launch the globally benchmarked ESG index last year, the first exchange-driven ESG index in Asia. This year Bursa Malaysia signed the United Nations Sustainable Stock Exchanges initiative, a peer-to-peer learning platform for exploring how exchanges, in collaboration with investors, regulators, and companies, can enhance corporate transparency and ultimately performance on ESG issues and encourage sustainable investment.
The ASEAN CAP10 Sustainability Forum is another ASEAN Capital Market Series programme tasked to build a more connected and sustainable ASEAN and the Exchange will host a second Sustainability Forum that will take place 8th -9th October 2015 with a focus on regulator practices to help build a more robust and sustainable marketplace.
1 Source: 2014 Global Sustainable Investment Review by the Global Sustainable Investment Alliance – 99% of the growth is focused in 3 key regions, the US, Canada, then Europe
2 Source: 2014 Annual Report, WFE
