KUALA LUMPUR: Malaysia is continuing to develop new financial assets, such as carbon credit-based solutions along the principles of Islamic finance, Prime Minister Datuk Seri Najib Tun Razak said.
He said the assets are sustainable and reward-generating to investors, underpinned by real economic activities, are end-to-end Shariah-compliant and can be sold to the world’s carbon buyers.
“In this regard, we will consider providing incentives to companies that offset their carbon footprint with Malaysian rainforest credit,” he said in his keynote address at Invest Malaysia 2016 here today.
Najib said Malaysia’s Green Technology Financing Scheme has successfully supported 188 projects, which have helped create nearly 4,000 jobs and saved the equivalent of 2.31 million metric tonnes of carbon emissions.
He said the government had set a target of recycling 40 per cent of the country’s waste by 2020 and pledged to reduce national carbon emissions by 40 per cent by the same year.
“I am told that by end-2015 we had already achieved a reduction of 35 per cent. We take these targets seriously, and shows the work that goes into meeting them,” he added.
Najib said the government had introduced tax incentives to encourage industries to adopt green technology, set targets for installed capacity of renewable energy, and made green growth an integral part of the 11th Malaysia Plan.
He also said the government was encouraging an ecosystem that facilitates the financing of socially-beneficial and sustainable ventures, such as the Sustainable and Responsible Investment Sukuk framework introduced by the Securities Commission, and the Environmental, Social and Governance (ESG) Index launched by Bursa Malaysia.
“I am pleased to see that there has been a steady increase in the number of companies participating in the ESG Index. There are now 34, which is a 42 per cent increase from the previous year,” he added.
He said since the launch of the ESG Index, namely the FTSE4Good Bursa Malaysia Index, 16 months ago, Bursa Malaysia had been working with FTSE Russell, a division under the London Stock Exchange Group, to develop a similar index for ASEAN.
“Today, I can also share with you the rolling out of the new FTSE4Good ASEAN 5 Index, or the ASEAN ESG Index, which means that companies listed on the exchanges of Singapore, Indonesia, Malaysia, the Philippines, Thailand and Vietnam which meet the ESG standards will be eligible for inclusion,” he added.
The two-day Invest Malaysia 2016 has brought together more than 2,200 delegates comprising fund managers, policy makers, capital market drivers and thought leaders to discuss opportunities in Malaysia.