Kenyataan Media
BURSA MALAYSIA ANNOUNCES LAUNCH OF ENVIRONMENTAL, SOCIAL AND GOVERNANCE INDEX
Bursa Malaysia Berhad (“Bursa Malaysia” or “the Exchange”) today announced the launch of the Environmental, Social and Governance (ESG) Index and realised the Prime Minister’s vision in Budget 2014 for it to be introduced. The FTSE4Good Bursa Malaysia (F4GBM) Index was developed in collaboration with FTSE as part of the globally benchmarked FTSE4Good Index Series and is aligned with other leading global ESG frameworks such as the Global Reporting Initiative and the Carbon Disclosure Project.
The F4GBM Index is used to measure the performance of companies demonstrating strong Environmental, Social and Governance practices. Constituents of the new index must meet internationally benchmarked criteria that measure such things as efforts in environmental conservation, the impact of social responsibility initiatives on the community and the practice of good governance through responsible and ethical decision making.
The CEO of Bursa Malaysia Berhad, Dato’ Tajuddin Atan said, “The introduction of our F4GBM index will let people look at value from a new perspective, one that takes into consideration non-financial aspects such as a company’s environmental and societal initiatives. Investors, shareholders, and clients are expecting greater responsibility and transparency from companies and their investments[1] and F4GBM will be the reference point and benchmark that companies can aspire to in efforts to step-up the standards in stakeholder value creation.”
Bursa Malaysia’s conversation on sustainability started almost a decade ago with the introduction of the Bursa Malaysia Corporate Responsibility framework in 2006, which was subsequently followed by the Shariah-based indices and corporate governance guidelines for listed companies in 2007. Today’s launch of their first index based on principles of sustainable investment is another commitment to the longevity of the marketplace.
The CEO of FTSE, Mark Makepeace said, “There is growing momentum from investors wanting to apply ESG into investment decisions. We are therefore delighted to collaborate with Bursa Malaysia again to launch this pioneering index and associated ESG Ratings which further builds on the successful partnership between the Exchange and FTSE.”
There have been a number of studies looking at Socially Responsible Investment (SRI) funds and indices to test how they perform against the broader market. One of the most comprehensive studies[2] considered 20 separate academic cases which showed evidence of a positive relationship between ESG factors and portfolio performance in half of these, with seven reporting a neutral effect and three a negative association.
The index, available from 22 December 2014, is the latest step in the sustainability roadmap of the Exchange that includes its commitment to maintain high standards of corporate governance in the marketplace and was made possible with funding from the Capital Market Development Fund.
The constituents of the FTSE4Good Bursa Malaysia are available at http://www.bursamalaysia.com/market/products-services/indices/ftse-bursa-malaysia-indices/overview/
[1]In a recent survey on sustainability 91% of investors responded to say that they believe that sustainability should be better embedded into discussions between companies and investors, and 88% believe that they should pay greater attention to sustainability in company valuations Source: The Environment leader-
[2] Demystifying Responsible Investment Performance: A review of key academic and broker research on ESG factors, 2007 - Mercer