KUALA LUMPUR: Bursa Malaysia Bhd (Bursa Malaysia), Alliance Bank Malaysia Bhd (Alliance Bank) and OCBC Bank (Malaysia) Bhd (OCBC Bank), entered into a Memorandum of Understanding (MoU) to establish #financing4ESG, an initiative aimed at improving Malaysian Public Listed Companies’ (PLCs) ESG adoption practices.
In a statement, it explained that under the MoU terms, Bursa Malaysia will collaborate with Alliance Bank and OCBC Bank in developing sustainable financing options that recognise PLCs’ ESG credentials in accordance with the FTSE4Good assessment criteria.
This will enable PLCs the opportunity to accelerate their ESG adoption while also improving their ESG ratings for inclusion into the FTSE4Good Bursa Malaysia Index, which is the Malaysian capital market’s leading ESG index.
PLCs eligible for the sustainability financing under this collaboration are those in the FTSE Bursa Malaysia EMAS Index, which forms the FTSE4Good ESG assessment universe.
This universe comprises companies of various sizes and industries, ranging from large cap PLCs, GLCs and conglomerates to mid and small SMEs and Shariah-compliant enterprises.
“The signing of the MoU with Alliance Bank and OCBC Bank underscores the exchange’s commitment towards accelerating ESG adoption among our PLCs, in line with our aspiration to elevate PLCs as regional leaders in this space,” said Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift.
“I am optimistic that this collaboration will spur the growth of sustainable finance while also enhancing PLCs’ appeal to investors.”
Alliance Bank Group chief executive officer Joel Kornreich said, “We believe it is important to help business owners adopt environmental, social and governance practices and innovations to reduce carbon footprint.
“When businesses make sustainable choices, they can be a force for good for the community and environment. Their choices will result in positive climate impact, social outcomes, and business’ profitability in the long term.
“We believe our collaboration with Bursa Malaysia enable us help businesses large and small to innovate and grow sustainably.”
OCBC Bank managing director, senior banker and head of Investment Banking Tan Ai Chin said, “We will work collaboratively with Bursa Malaysia by synergising OCBC Bank’s leading experience in pioneering various sustainable finance transactions and capitalising on Bursa Malaysia’s ESG database to provide optimal financing solutions for PLCs.
“We aim to mainstream the adoption of sustainable finance to further accelerate the PLCs’ sustainability agendas, as a means to support Malaysia Government’s commitment towards achieving carbon neutrality by 2050.”
In addition to the competitive financing offered by Alliance Bank and OCBC Bank, PLCs will obtain non-monetary benefits from the collaboration’s branding and capacity building exercises.
In this regard, the exchange will provide access to its investor relations engagements and event platforms, as well as the opportunity to participate in specialised technical workshops on climate-related disclosures.
The #financing4ESG initiative sets the foundation for Bursa Malaysia to collaborate with other ecosystem players to advance the nation’s ESG adoption, which is in line with the Exchange’s vision to be a leading sustainable and globally connected marketplace.