KUALA LUMPUR: The Malaysian capital market is urged to facilitate fundraising and investments to support the government's priorities in achieving its sustainability and climate goals.
Securities Commission Malaysia (SC) chairman Datuk Mohammad Faiz Azmi, said the SC is dedicated to regulating and developing the Malaysian capital market. It aims to achieve this by promoting and maintaining a fair, efficient, secure, and transparent market environment. Additionally, the SC is committed to encouraging the development of an innovative and competitive market.
“The SC has paved the way for sustainability since 2011, when Sustainable and Responsible Investment (SRI) was embedded in the Capital Market Masterplan CMP2 as a key growth strategy.
“Under CMP3 and the SRI Roadmap, the SC continues to develop a robust SRI ecosystem in Malaysia. This includes introducing innovative capital market products to meet the diverse needs of businesses and investors, he said in his keynote address at the SIDC Sustainable and Responsible Investment Conference 2024: Investing in Human Wellbeing and the Planet today.
According to Mohammad Faiz, Malaysia has witnessed a significant surge in sustainable investments.
“As of December 2023, there were 68 SRI funds with a net asset value of RM7.7 billion, a significant increase from just seven SRI funds in 2020 at RM1.46 billion.
“We live in a connected world, and while our investments have environmental and climate impacts, they are also connected to the well-being of the people. Societal issues are crucial to achieving a balance in transition towards our sustainability goals.
“The most vulnerable in our communities, including micro and small and medium enterprises will need to be included in the race towards net-zero goals.
“Clear policies and guidelines will help MSMEs transition to a low carbon economy,” he said.
He mentioned that last month, the SC introduced a five-year plan for MSMEs and mid-tier companies to enhance their access to financing from the capital market and support their entry into the public market.
“Once the framework is in place, it will hopefully act as a ladder for smaller companies to use to grow. This is in line with the Madani Economic Framework to be more inclusive and helpful to the smaller players. The five-year roadmap is the latest in a series of measures we have launched over the years to support the MSME and MTC sectors which in 2022, contributed about 74% to our GDP and employed some 64% of the Malaysian workforce,” he pointed out.
Mohammad Faiz, who was recently appointed SC chaiman to replace Datuk Seri Awang Adek Hussin who retired, said companies are increasingly adopting sustainability practices, with some more advanced than others, and more investors have or are incorporating sustainability into their investment strategies. “There is a vital connection between the choice of our investment and its impact on societal resilience and environmental sustainability.”
He said the latest report from the International Energy Agency’s World Energy Investment 2024 published this month stated that most countries in Southeast Asia now have ambitious long-term clean energy goals, but investments are not yet on track. He however stressed that there were significant gaps between investment trends and the region’s long-term goals.
“The annual average energy investment over the last three years, according to the report, was US$72 billion, but would need to increase to over US$130 billion (RM612 billion) to align with the Announced Pledges Scenario (APS) of countries in the region by the end of the decade.
“Malaysia is one of the eight out of 10 countries in Southeast Asia that have announced target dates to achieve net zero carbon emissions in 2050 as outlined in the 12th Malaysia Plan. In 2021, Malaysia revised its Nationally Determined Contribution commitment to the Paris Agreement, aiming to reduce 45% of carbon intensity against GDP by 2030.,” he said.
To achieve its energy transition goals, he stated, Malaysia needs RM1.3 trillion between now and 2050.
“It includes investments in renewable energy, energy efficiency, and green mobility. More must be done to ensure that investment reaches the right places with the maximum impact on sustainability.
“We also need to plan on how to fund climate adaptation needs to cope with increased temperatures and sea level rises,” he said.
