Local fund managers believe companies with environmental, social and governance (ESG) standards are most likely bound to succeed in delivering sustainable returns, amid the ongoing COVID-19 crisis.

Employees Provident Fund (EPF) chief executive officer Tunku Alizakri Raja Muhammad Alias said ESG is the best barometer for investors to determine potential investments.

"For EPF, we have moved away from logic structured stock-liked thinking by looking at the balance sheet, profit and loss. We believe ESG has distinct market client impact in term of profitability.”

"Based on our investment portfolio, our top social stocks actually went down less than 10 per cent compared to the FBM KLCI, which went down more than 16 per cent," he said during a panel discussion at Invest Malaysia 2020 here today.

He said ESG stocks has its resilience as it is a definite 'need' to have, emphasising that EPF is looking into companies that embrace social aspects of their business and made into a real business.

"We look at investments that have positive ESG and helps the value of our investments in total.”

Alizakri said fund managers and regulators should introduce a long-term plan on how to manage and balance on the needs of domestic and global exposure.

Posted by

New Straits Times