Bursa unveils Environmental, Social and Governance Index

Tajuddin says the introduction of the index would let people look at value from a new perspective.

KUALA LUMPUR: Bursa Malaysia Bhd has announced the launch of the Environmental, Social and Governance (ESG) Index.

It said in a statement that the FTSE4Good Bursa Malaysia (F4GBM) Index was in line with the Prime Minister’s vision in Budget 2014.

It said the Index was developed in collaboration with FTSE as part of the globally benchmarked FTSE4Good Index Series and was aligned with other leading global ESG frameworks such as the Global Reporting Initiative and the Carbon Disclosure Project.

The F4GBM Index is used to measure the performance of companies demonstrating strong ESG practices.

Constituents of the new index must meet internationally benchmarked criteria that measure such things as efforts in environmental conservation, the impact of social responsibility initiatives on the community and the practice of good governance through responsible and ethical decision-making.

Bursa chief executive officer Datuk Tajuddin Atan said that the introduction of the F4GBM index would let people look at value from a new perspective, one that took into consideration non-financial aspects such as a company’s environmental and societal initiatives.

“Investors, shareholders and clients are expecting greater responsibility and transparency from companies and their investments and the F4GBM will be the reference point and benchmark that companies can aspire to in efforts to step up the standards in stakeholder value creation,” he said.

Meanwhile, FTSE CEO Mark Makepeace said there was growing momentum from investors wanting to apply ESG in investment decisions.

“We are therefore delighted to collaborate with Bursa Malaysia again to launch this pioneering index and associated ESG Ratings which further builds on the successful partnership between the exchange and FTSE,” he said.

The index, available from yesterday, is the latest step in the exchange’s sustainability roadmap . — Bernama