12 members of the Institutional Investor Council (IIC) joined together to make a pledge to support financial institutions to fulfil their crucial role in driving sustainable development in Malaysia and across ASEAN. The pledge was made at the KWAP Inspire: Environmental Conference 2018 held in Kuala Lumpur on July 18, convened by Kumpulan Wang Persaraan (Diperbadankan) [KWAP]. This effort includes commitments to drive responsible lending practices by banks and to build members’ capacity on responsible investment. “One way that financial institutions can drive sustainable development is by mainstreaming ESG in their loan portfolios. This can be done by directly linking the cost of, and access to, loan capital to clients’ environmental and social performance across the entire lending portfolio”, said Dato’ Wan Kamaruzaman, the Chief Executive Officer of KWAP and the Chairman of the Institutional Investor Council. “In addition to this, financial institutions can develop ‘green’ products to finance environmentally sustainable projects, as they transition their portfolios away from non-green investments”, he added. The new commitment by the IIC members re-affirms their dedication to investor stewardship, a key aspect of responsible investment and the Malaysian Code for Institutional Investors.In summary, the IIC members pledged to:

1. Engage portfolio banks to encourage better management of environmental and social risks and opportunities, including adoption and disclosure of relevant policies and processes across all their business lines and incorporation of climate and material ESG issues into strategy and board responsibilities.
2. Advance the adoption and application of best practices in responsible investment and stewardship, both through the above engagement and a commitment to build capacity on responsible investment, beginning with the organisation of knowledge sharing sessions.

A total of twelve IIC members joined together to take the pledge. They are:

1. Kumpulan Wang Persaraan (Diperbadankan) [KWAP]
2. Employees Provident Fund (EPF)
3. Lembaga Tabung Angkatan Tentera (LTAT)
4. Permodalan Nasional Berhad
5. Khazanah Nasional Berhad
6. Lembaga Tabung Haji (LTH)
7. Minority Shareholders Watch Group (MSWG)
8. Social Security Organisation (SOCSO)
9. Aberdeen Islamic Asset Management Sdn Bhd
10. Private Pension Administrator Malaysia (PPAM)
11. ValueCAP Sdn Bhd
12. Life Insurance Association of Malaysia
13. Considering the significant size of the combined assets under management of these IIC members, they are in a prime position to both lead by example and influence other financial institutions to further take up responsible lending and investment practices.

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