Recognising the rising global trend of green financing, Capital Markets Malaysia has put together a series of workshops on this pertinent segment of the capital market. The most recent workshop, held in collaboration with Bursa Malaysia and the World Bank Group (WBG), took place on 13th October 2017 in conjunction with the iGEM 2017 Conference organised by the Ministry of Energy, Green Technology and Water (KeTTHA).
This second instalment in the workshop series targeted the senior management of public listed companies (PLCs) looking to potentially issue green bonds or green sukuk. The workshop agenda featured a series of panel sessions and presentations focusing on the concerns and interests of PLCs during the issuance stage and provided participants with the latest trends around going green and the development of the green sukuk market in Malaysia.
Green financing goes beyond providing the normal benefits of investing and funding for investors and issuers but also considers its impact to the environment and prioritises sustainability. The importance of green financing has grown in significance in the country specifically since Malaysia, alongside 190 other countries, adopted the United Nations Paris Agreement to keep the global temperature rise under two degrees Celsius per year in order to tackle the concerns on climate change. Also, in promoting international sustainability, Malaysia also adopted the 17 Sustainable Development Goals (SDGs) to be achieved by 2030.
With Malaysia setting a benchmark with their green agenda, the technical workshop provided participants with a direct and insightful view by Lee Choo Boo, Chief Executive Officer of Itramas Corporation Berhad who oversaw the issuance of Malaysia’s biggest green Sustainable and Responsible Investment (SRI) sukuk of RM1 billion. Quantum Solar Park Malaysia is co-owned by Itramas Technology Sdn Bhd, MaltechPro Sdn Bhd and CamLite Sdn Bhd.
Aside from that, delegates also had the opportunity to listen to Hatini Mat Husin, Senior Director & Head of Debt Capital Markets, Affin Hwang Capital who advised on Tadau Energy Sdn Bhd’s successful issuance of the World’s First Green Sukuk of RM250 million in July 2017. Hatini stated, “currently in order to issue a green sukuk in Malaysia, it is more on creating awareness because in Malaysia green agenda demand is not there yet and it is driven by the incentives that are being offered by the government”. She also added that for there to be demand for green technology, the public needs to be aware of the supply of green technology and its benefits to the environment.
Both issuances by Quantum Solar Park Malaysia and Tadau Energy were pursuant to the Securities Commission Malaysia (SC)’s SRI Sukuk Framework introduced in 2014.
Bursa Malaysia also recognises the importance and increasing developments in the green technology sector. “As the Exhange, Bursa serves as a channel between policymakers, issuers and investors and serves to promote standards, enhance transparency in the area of disclosure, as well as facilitate growth in the capital markets. We recognize the growing importance of Green Finance, and are aiming to further nurture the ecosystem for such products and services, by tailoring to local and global investor demand” stated by Yew Yee Tee, Chief Regulatory Officer, Bursa Malaysia during her concluding remarks.
Grace Tang, Head of Corporate Finance, Group Strategy and Innovation from Sime Darby Group provided a view on the company’s notable track record in sustainable development, having started their sustainability journey 10 years ago.
Other speakers who graced the staged at this technical workshop were senior representatives of the World Bank Group, Malaysia Investment Development Authority (MIDA), Khazanah Nasional Berhad, Amundi Asset Management and RAM Consultancy; all of whom shared their experiences and challenges faced from their organisations’ perspective on their green technology activities.
Prior to this one, Capital Markets Malaysia’s first technical workshop was successfully held on 10th July 2017 and was aimed at market intermediaries made up primarily of senior representatives from investment banks. The third and final instalment will be targeted toward the investor community and will be held in the near future.