The growing awareness of the benefits of investment products that incorporate environmental, social and governance (ESG) principles has spurred the demand for sukuk products. However, the supply remains scarce, says BIMB Investment Management Bhd CEO Najmuddin Mohd Lutfi. “While there is a considerable number of equity and bond funds that integrate ESG principles, there was no such sukuk product for retail investors. The typical investment amount for sukuk is RM5 million per lot,” he adds. To fill this gap, the company has launched the world’s first ESG-based retail sukuk fund — the BIMB ESG Sukuk Fund. It is the first sukuk fund to adhere to the Securities Commission Malaysia’s Guidelines on Sustainable and Responsible Investment Funds.To ensure that the fund adheres to ESG principles and those of the United Nations Global Compact (UNGC), BIMB uses Arabesque Asset Management Ltd’s S-Ray programme, which determines the issuer’s ESG and UNGC score. Any score above 50 will be considered for the portfolio, says Najmuddin.

Posted by

The Edge Markets