Malaysia's Islamic Finance Leadership A Catalyst For ESG-Driven Investment: RAM Ratings

KUALA LUMPUR, Sept 22 (Bernama) -- Malaysia's leadership in Islamic finance is a catalyst for environmental, social and governance (ESG)-driven investment, said RAM Ratings. RAM Ratings Chief Executive Officer Foo Su Yin said Malaysia has the ecosystem needed to support the growth of Islamic finance, with pension funds and institutional investors creating the demand for sukuk along with a steady stream of corporate. Malaysia's ecosystem also has infrastructure and Islamic financial institution issuers creating the supply, a robust backbone of regulations, capable and innovative legal, Shariah and banking professionals as well as domestic credit rating agencies, Foo said. "Thus, to see a similar growth trajectory for ESG/responsible investment, the government needs to follow a similar path to that which has led to Malaysia's leadership position in Islamic finance," Foo was quoted as saying in a report entitled Investor Obligations and Duties in Six Asian Markets. RAM was among the featured voices in the research paper jointly published by Principles for Responsible Investment (PRI), the United Nations Environment Programme Finance Initiative and The Generation Foundation. Meanwhile, PRI Managing Director Fiona Reynolds said fiduciary duty remains the biggest barrier to ESG integration. "In many Asian markets, responsible investment is still a new concept; however, momentum around this issue is growing, which is why it’s vital that investors and policymakers work together to ensure sustainability issues continue to gain traction across the region," she added. -- BERNAMA