Bursa Malaysia Plans ESG Index

Bursa Malaysia’s chief executive officer, Datuk Yusli Mohamed Yusoff, announced recently that Malaysia’s stock exchange plans to have its own Environmental, Social, Governance (ESG) Index in the next few years. This is said to be a bid to to attract investors with increasing awareness of this area, Datuk Yusli was reported to have said at the CSR Asia Summit 2009 in Kuala Lumpur recently.According to news reports, he said the local bourse would work with an index provider to create the index, and then rate all the companies listed and select the best ones for the ESG Index. Datuk Yusli was quoted as saying:

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.

He advised companies facing environmental and climate change issues, such as those in the oil palm industry, to address them head-on, as it would affect how their products are perceived in the global market.

Yusli said Bursa Malaysia has been promoting corporate governance for a long time and has even issued a manual to help guide board members of listed companies in the area. Now, although ESG is not yet the trend compared to Corporate Social Responsibility (CSR), an index is important to the investment community as it focuses on governance.

With benchmarks like the Dow Jones Sustainability Index, Datuk Yusli said firms will have to adhere to ESG if they want to address a global marketplace. At the same event, CSR Asia Chairman, Richard Welford, was reported to have said that institutional investors have begun to see the ESG area as significant.

In related news, according to the Asian Sustainability Rating (ASR), researched by CSR Asia, Malaysia placed sixth among the top ten Asian countries that are heeding corporate social responsibility (CSR) disclosure. Australia was in the top spot, followed by China in second place. The remaining countries were: Hong Kong (third); India (fourth); Japan (fifth); Pakistan (seventh); Philippines (eight); Singapore (ninth); and Thailand (tenth).

The research ranked the 200 largest listed companies in ten markets operating in Asia Pacific on their sustainability disclosure.

Tweet This Post