Islamic Finance

Malaysia first in region to launch Asean Green Bond Standards

| 08 November, 2017
 Avisy Yusof
Malaysia first in region to launch Asean Green Bond Standards
Photo: Securities Commission Malaysia chairman Tan Sri Ranjit Ajit Singh, at the International Organisation of Securities Commissions (IOSCO) meeting. 2017. NST photo by AIZUDDIN SAAD

*Salaam Gateway editor's note: Corrections to this article have been made by New Straits Times. The corrected article can be found on Salaam Gateway at this link: http://bit.ly/2hZzAyd

Wed Nov 8, 2017 | 1:57PM MYT | KUALA LUMPUR

Malaysia became the first country in the Asean region to launch the Asean Green Bond Standards (AGBS) in conjunction with the Asean Capital Markets Forum (ACMF).

Securities Commissions Malaysia chairman Tan Sri Ranjit Ajit Singh said the green financing and green investments have been gaining strong traction in creating the whole momentum to develop capital markets.

"Asean must grow in a responsible and sustainable manner. Growth cannot come at tue expense of our future generations.

"We need to support efforts to protect environment and the AGBS, which would help in the allocation of resources towards climate friendly investments," he told reports after launching the inaugural of ACMF in Kuala Lumpur, today.

He said it is also important for a country to start focusing on sustainable financing and increasing the recognition of the importance of sustainable and responsible investments.

"In Malaysia, the Securities Commissions has put forward a framework for sustainable and responsible investments (SRI).

"We have done this through facilitating the growth of sukuk segments like the SRI sukuk framework for the development of SRI funds framework.

"We are certainly encouraging the development of sustainable and responsible investments," he added.

He said Malaysia ties in nicely with the Islamic Finance agenda, that recognises the association for SRI funds marker in Asia.

"It is important to build on that momentum. We think sustainable finances are important to create an ecosystem," he said.

He pointed out Asean has launched the AGBS to develop a green bond asset class, helping to finance large infrastructure financings and ensure this extends in sustainable initiative.

On the recent Budget 2018 strengthen, he said the budget is focused on several dimensions and inclusive that focuses on addressing the needs of the rakyat.

"It's also pragmatic as it focuses on developing long-term potential for the country's competitiveness in terms of education, skills development, digital market technology.

"The budget is also a responsible budget that the target of having fiscal discipline was being maintained," he said.

He said these aspects are important to position the country, citing that it is something that investors see very favourably as it would provide the right potential for Malaysia to continue to be attractive in terms of growth prospect as well as an attractive destination for investors.

"On the bond market, Malaysia is a very large market that continues to find ways to enable more access to the bond market segment.

"The AGBS is designed to be a benchmark - dependent on the types of issuances that come in. The overall amount of infrastructure financing that the country or the region has got to go through is significant," he said.

Meanwhile, International Capital Market Association (ICMA) chief executive Martin Scheck said it welcomes the alignment of AGBS with Green Bond Principle (GBP), representing voluntary international guidelines that recommend transparency and disclosure as well as promote integrity in the green bond market.

The AGBS were developed based on ICMA's GBP tailored to meet the needs and commitment of Asean.

The AGBS label is to be used only dor issuers and projects in the region, specifically excludes fossil fuel related project.

Permodalan Nasional Bhd (PNB) vis its wholly owned subsidiary PnB Merdeka Ventures Sdn Bhd was the first issuers in the region to have pledged to adopt the AGBS for its sukuk issuance to finance the construction of the Warisan Merdeka Tower.

Copyright New Straits Times