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CEO's Message

"We are pleased to present Bursa Malaysia’s Sustainability Report 2016 to all our stakeholders."
~ Datuk Seri Tajuddin bin Atan, CEO

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Dear Stakeholders,

Bursa Malaysia plays a unique role for the Malaysian capital market as we are a regulator, a market operator, an influencer and a public listed company (PLC). We are in a position to champion the cultivation of the sustainability culture in the capital market, while as an exchange we are able to not only act as an influencer to other listed issuers but to also set the tone and pave the way for joint contribution from all listed issuers to the development of sustainable capital market.

In 2016 we see a growth in responsible investment with more investors subscribing to the UN Principles of Responsible Investment (PRI), now representing 1500 signatories worth US$62 trillion in Assets Under Management (AUM) globally. This will certainly result in higher demand for sustainability and governance disclosure by business. By disclosing such information through annual reports and SRs, our listed issuers are preparing for the future by catering to these growing investor requirements where value creation will be articulated through business strategy incorporating the monitoring of non-financial metrics.

We see sustainability as a strategic area to position Bursa Malaysia as the leading exchange in ASEAN by 2020. As stock exchanges around the globe have stepped up their sustainability efforts through listing requirements, guidance and ESG-related products and services, it is important for Bursa Malaysia to innovate and stay ahead of the curve in order to secure our leading position as the sustainable capital market for responsible investment and fund raising in the region.

Sustainability is also a risk management tool which helps us holistically evaluate and improve the way we manage and operate our business. There are clear benefits for businesses who embed sustainability principles within their organisation, ranging from better long term financial performance, to increased access to capital and attraction and retention of talent.

Our focus in 2016 has been on revisiting our materiality process and engaging with our stakeholders as part of our long-term sustainability strategy. During the year, we conducted materiality assessment and identified our material sustainability matters, which are Market Integrity and Stability, Competition, Technology and Talent. These four matters are deliberated in-depth in this report. In addition to the identified material factors, we continue to report on our environmental and community initiatives as part of our sustainability practices.

We ensure the stability and integrity of the Malaysian capital market and hence, sustainability is important to us. Over the long term this sustainability will not only ensure steady operation of the capital market, but that it also continues to grow and appeal to the investment community who are increasingly considering sustainability in their investment process.

We also believe that the Bursa Malaysia Sustainability Framework for listed issuers will result in greater disclosure of sustainability performance data. Our aim is for listed issuers to not only disclose their performance but also embed sustainable practices within their businesses. We want listed issuers to realise that improved performance on material issues will result in a positive impact on the bottom line, as well as appeal to the increasing number of responsible investors. To support our listed issuers with this opportunity, we have provided over 25 advocacy programmes for listed issuers in 2016 which were attended by over 800 participants, as well as engaging with 100 of our listed issuers to help them with their first sustainability reporting cycle and how to grow sustainability strategy within their organisation.

Among the challenges we experience are shortages of local talent, especially as we are the only exchange in the country and our work is highly specialised. Attracting and retaining talent is a key area for us and we have focused our attention on developing our employees through various training programmes offered throughout the year. Stock exchanges also face increased risks from information technology such as cyber threats or technology errors that bring severe disruptions to exchange operations. On the other hand, there are also exciting opportunities to develop our services utilising the advances in technology to support increased accessibility and capacity. We are closely monitoring the various advances in technological developments to determine how these will impact us and how we can leverage on these technologies to capture new segments of the market and put to use for our benefit.

We take great pleasure in informing our stakeholders that Bursa Malaysia has remained in the top 3 Malaysian companies listed in the Channel NewsAsia Sustainability Ranking for the third year running. We also continue to remain as a constituent of the FTSE4Good Bursa Malaysia Index even though there was an increase of the inclusion threshold for Emerging Markets from 2.0 to 2.2 in the December 2016 review. This review by FTSE Russell is an initiative to narrow the inclusion threshold difference between the Emerging and Developed Markets.

Moving forward, we will continue to focus on our sustainability strategy looking to our opportunities and risks, as well as our enduring commitment to improvement and further disclosure. This includes exploring opportunities for Bursa Malaysia to contribute to the United Nations Sustainable Development Goals (UN SDGs), supporting global development objectives and addressing critical economic, social and environmental challenges such as climate change and gender equality.

Datuk Seri Tajuddin bin Atan
Chief Executive Officer