SRI Sukuk to boost socially responsible investments
KUALA LUMPUR: The Securities Commission will introduce a framework for socially responsible sukuk instrument, or Social Responsible Investment (SRI) Sukuk, to finance sustainable and responsible investment initiatives, it was announced yesterday.
Prime Minister Datuk Seri Najib Razak said to enhance global competitiveness, efforts will be intensified to promote the country as a market for SRI.
The government will also establish a SRI fund, which will invest in listed companies that demonstrate high accountability, transparency and sustainability, including inclusiveness in diversity encompassing gender, age and ethnicity.
"For a start, Valuecap will allocate RM1 billion to invest in companies that score high on the environmental, social and governance index (ESG). I trust this will encourage more companies to show high commitment towards social responsibility," said Prime Minister Datuk Seri Najib Razak in his 2014 Budget speech yesterday.
ESG is among measures to be implemented to raise the profile of listed companies that practise greater social responsibility.
RAM Rating Services Bhd head for Islamic Ratings Zakariya Othman said the introduction of SRI Sukuk is timely.
He noted that while progress has been made in the development of quantitative measures that help establish whether a company suits Islamic investments, none has been introduced to track the social performance of companies whose activities are consistent with syariah principles.
"Thus, the introduction of this framework will be a good base to initiate such index."
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