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30 Sep | Monday
RAM Sustainability: Responsible finance a catalyst for corporate Malaysia

RAM Sustainability views responsible finance as a catalyst for Malaysian companies to adopt sustainable business practices, transition into climate-friendly sectors and pioneer green technologies. The formation of the Joint Committee on Climate Change on 27 September 2019 by Bank Negara Malaysia (BNM) and Securities Commission Malaysia (SC) is a clear signal that sustainable finance is here to stay, and Malaysian corporates need to adapt quickly.

“The equity, bond and banking markets are now more sensitive to environmental, social and governance (ESG) risks. They are shifting away from businesses that are harming biodiversity or contributing to climate change,” according to Promod Dass, CEO of RAM Sustainability during the SC’s Workshop - Addressing Climate Change Through Capital Markets at BNM’s Regional Conference on Climate Change – held on 27 September 2019.
 
Collectively responsible for more than an estimated USD100 tril of global assets under management, the decisions of signatories to the Principles for Responsible Investment (PRI), Principles for Sustainable Insurance and Principles for Responsible Banking could affect the funding availability and costs of companies tapping the capital markets. The Government of Malaysia’s strategic investment fund (Khazanah Nasional Berhad), the government pension fund (KWAP), the Employees Provident Fund (EPF) and BIMB Investment Management Berhad are all PRI signatories.

“The SC’s emphasis on green bonds and its Sustainable Responsible Investment (SRI) Sukuk framework, combined with BNM’s Value-Based Intermediation through Islamic banks, have positioned Malaysia well on a global scale,” highlighted Promod, who is also the Deputy Group CEO of RAM Holdings Berhad (RAM Group). RAM Group is an active contributor to sustainability and global green finance development. On 26 May 2016, RAM Ratings joined the global line-up of six pioneer credit rating agency signatories to the PRI’s Statement on ESG in Credit Ratings.

In September 2019, Edra Solar Sdn Bhd’s (Edra Solar) proposed RM245 mil ASEAN Sustainability SRI Sukuk was assigned a credit rating by RAM Ratings, together with environmental/social benefit ratings from RAM Sustainability. This distinctive feature renders Edra Solar’s sukuk a pioneer in Malaysian sustainability sukuk.

This year, RAM Ratings rated the world’s first mini-hydro green sukuk by Telekosang Hydro One Sdn Bhd, which also received a second opinion from RAM Sustainability. In 2018, RAM Ratings also rated the world’s first UN Sustainable Development Goals sukuk issued by HSBC Amanah Malaysia Berhad, under the bank’s RM3 bil Multi-Currency Sukuk Programme (2012/2032). The year before that, RAM Ratings assigned ratings to the world’s first green sukuk issued by a solar power player, Tadau Energy Sdn Bhd. In 2015, RAM Ratings rated the world’s first SRI sukuk – Sukuk Ihsan – pioneered by Khazanah.

RAM Sustainability a wholly owned subsidiary of RAM Group is a provider of sustainability services and ESG analytics. RAM Sustainability is the first ASEAN-based provider of sustainability ratings and second opinions and has the distinction of being the first Registered Observer of the International Capital Market Associations’ Green Bond Principles, Social Bond Principles and Sustainability Bond Guidelines in ASEAN.

For further details, please go to www.ram.com.my/sustainability
 

Analytical contact
Gladys Chua
(603) 3385 2611
gladys@ram.com.my
 
Media contact
Padthma Subbiah
(603) 3385 2577
padthma@ram.com.my
 

 

 Date of release: 30 September 2019

The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.

Published by RAM Rating Services Berhad
© Copyright 2019 by RAM Rating Services Berhad

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