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Bursa Malaysia Plans Sustainability Index

Friday, 30 October 2009

Bursa Malaysia is set to establish its own Environmental, Social, Governance (ESG) Index in the next few years, according to its chief executive officer, Datuk Yusli Mohamed Yusoff. This bid is in the hope of attracting investors with increasing awareness of this area. To this end, Datuk Yusli was reported to have said the local bourse plans to work with an index provider, and then rate all listed companies, selecting the best for the ESG Index. He told reporters about the new development at a CSR summit in Kuala Lumpur recently. He added, "If investors are concerned with this issue, the ESG Index should give an indication. In the long run, for business to succeed and sustain, they should look at ESG seriously." Datuk Yusli advised businesses faced with environmental and climate change issues, such as those in the oil palm industry, to address them properly, as it would ultimately impact how their products are perceived in globally. Although ESG is not as recognizable a trend as Corporate Social Responsibility (CSR), indexes are important to the investment community. According to Datuk Yusli, Bursa Malaysia has been promoting corporate governance for a long time and has also issued a manual to help guide board members of listed companies. He was reported to have said, "We hope this will go someway towards helping them in addressing some of these issues. There is no way for companies to ignore ESG issues and have to include it in their business processes." With benchmarks like the Dow Jones Sustainability Index, Yusli said firms would have to adhere to ESG if they want to address a global market place. According to him, some of the larger firms have been exposed to this kind of issues but those only offering basic products and services may not be aware of it.