PETALING JAYA: Bursa Malaysia Bhd and the London Stock Exchange Group (LSEG) today signed a memorandum of understanding (MoU) to expand the environmental, social & governance (ESG) collaboration between the two exchanges as well as explore new areas of opportunity.
Under the MoU terms, Bursa Malaysia and FTSE Russell, LSEG’s global multi asset index and benchmark provider, will expand its coverage of ESG scores to include all PLC listed on the Main and ACE Markets. Currently, ESG scores are only available for PLC that are part of the FTSE Bursa Malaysia Emas (FBM Emas) index, which account for 30% of total Malaysian PLC. This expanded coverage will enable more PLCs to better measure their ESG performance.
Bursa Malaysia CEO Datuk Muhamad Umar Swift said it has been working with LSEG to build a stronger suite of ESG products.
“Following the launch of the FTSE Bursa Malaysia Top 100 ESG Low Carbon Select Index Series in August 2022, this MoU is an extension of our partnership, and we hope it will bring more successes to our institutions.”
LSEG group leader, sustainable finance and investment Cornelia Andersson said this agreement will yield a significant increase in the ESG data and analytics available on listed companies in Malaysia.
“We are also exploring the development of an ESG corporate reporting solution to increase disclosure of climate related risks and opportunities for investors. It follows the launch of a new ESG and low carbon benchmark covering the largest listed issuers on the exchange.”
The MoU will also see the exchange and LSEG collaborate on ESG educational initiatives, support the implementation of sustainable supply chain finance and transition financing workflows among financial institutions (FI), as well as explore corporate ESG reporting solutions that are aligned with internationally recognised standards such as the Task Force on Climate-Related Financial Disclosures. All of these would aid in enhancing PLCs’s ESG practises and disclosures, address the Malaysian FIs’ climate-related requirements, while also supporting the exchange’s goal of being a sustainability catalyst in the Malaysian capital market.
“We believe the outcome of this MoU will result in improved performance and stature of our PLC, as well as sustained investor interest in our capital market, benefiting Malaysia’s economic growth overall,” Umar added.