Malaysia has raised close to US$2 billion (RM9.2 billion) via 21 sustainable and responsible investment (SRI) sukuk issuers from 2015 to 2021, according to the Securities Commission Malaysia (SC).
SC chairman Datuk Seri Awang Adek Hussin said the first SRI sukuk was issued in 2015, which funded the development of trust schools in Malaysia, followed by the world’s first green sukuk in 2017 to finance the construction of large-scale solar power plants.
“In Malaysia’s case, the presence of dedicated regulatory structures, particularly for Islamic SRI, has allowed Islamic instruments and investments to flourish,” he said at the Fourth Islamic Sustainable Finance and Investment Asia Forum here today.
Awang Adek said he attributed Malaysia’s decades-long experience in Shariah products and services to three critical prerequisites for continued market and industry evolution, namely a facilitative regulatory framework, a supportive ecosystem and like-minded partners.
Regionally, he said total issuances of labelled Asean green, social and sustainability bonds and sukuk amounted to US$27.2 billion as of Aug 19, 2022 with Malaysia accounting for 20 per cent of the total.
“This includes Malaysia’s sovereign sustainability sukuk, which is aligned to the Asean sustainability bond standards,” he said.
Meanwhile, Awang Adek said Malaysia is currently developing an SRI taxonomy for the Malaysian capital market, which is in line with its SRI roadmap recommendations.
“By classifying what economic activities are considered as sustainable, the SRI taxonomy will encourage capital allocation to sustainable initiatives.
“It will also shape transparency on climate risk management and transition financing as well as broaden stakeholder engagements,” he said.
He added that together with technical capacity-building programmes, the SRI taxonomy would foster continued adoption of the environmental, social, and governance (ESG) and other sustainability goals.