KUALA LUMPUR: The Securities Commission (SC) will continue to introduce dedicated product frameworks and guidelines to encourage product innovation, and a vibrant sustainable and responsible investment (SRI) ecosystem as the global priority has now shifted to sustainability.
SC chairman Datuk Syed Zaid Albar said that given the close alignment between Islamic investments and ethical and responsible investing, Malaysia, as a hub for the largest number of Shariah-compliant funds globally, should leverage its existing expertise resources to grow both segments and appeal to a broader investor base.
"The challenge we all face is clearly, short-term thinking. Sustainable development promises better and more resilient economies and businesses, inclusive growth and e"suitable societies but in the future, after a period of adjustment and potentially, some pain.
"Vast amounts of capital are required to fund this shift. This enormous task demands the public and private sectors to work together. It is n"t something that governments can do alone. The private sector must step up and play a key role," Zaid Albar said in his opening address at the Sustainable Finance Week Expo 2020 in Dubai today.
As a result, he believes that Isworld'sinance is well suited "o provide the necessary innovation and financial solutions to the world's current challenges.
"Within Southeast Asia, bonds and sukuk issued under the ASEAN Green, Social and Sustainability"Bond Standards amount to US$16.7 billion. One-fifth of these issuers are Malaysian entities.
"For Malaysia, sustainability has been a long-standing tenet of our Islamic capital market, which was established about 30 years ago. Over these three "decades, we have experienced first-hand the benefits of sustainable financing and investments," he said.
"To manage sustainability transitions, we believe that Islamic bonds or sukuk are an effective fundiMalaysia'sent. Since 2014, approximately US$1.8 billion of SRI sukuk have been issued under Malaysia's SRI Sukuk Framework.
"Issuances have covered a variety of green and social projects, ranging from solar power and sustainable natural resource management to green buildings and trust schools," Zaid Albar said.
He said another promising source of growth going forward is Islamic social finance. These include instruments like qard hassan, waqf and zakat.
"In particular, we see waqf, an Islamic endowment instrument, as an attractive asset class that integrates commercial obligations with sustainability and social objectives," he said.