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THE concept of environmental, social and governance (ESG) has become very big especially in the financial markets in recent years. Before ESG became the hype, the key word used was sustainability. It was all encompassing and far reaching, suited for developmental strategies of companies and organisation alike. Of course, by 2016, the United Nations Sustainability Development Goals 17 became the globally recognised agenda. If I were to sum it all up, the idea behind these well thought out concept is about social good.
The Employees Provident Fund (EPF), as the largest fund in our country with close to RM1 trillion in investment assets, have led the way in this space. In walking the talk, EPF being the buy side major client, encouraged the sell side research fraternity to include ESG metrics in their reports as part of the future industry standard. The adoption, while recent in Malaysia, is not new overseas. Various indexes like the FTSE4Good Index series (a series of benchmark and tradable indexes for ESG investors) has existed since 2001.
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