26/03/2025

ESG WEDNESDAY | MAR 26, 2025

12

Role of governance in sovereign wealth funds

Bank Rakyat gets two awards for social and environmental commitments KUALA LUMPUR: Bank Rakyat received two international recognitions for its continued commitment to supporting communities and driving financial inclusion and environmental sustainability through its Community Outreach activities. Bank Rakyat said in a statement that it was recognised as the “Most Socially Responsible Bank” at the 12th International Finance Awards at the Waldorf Astoria Bangkok, Thailand, and also received the Best Environmental Excellence Award at the 17th Annual Global Corporate Social Responsibility (CSR) and Environmental, Social and Governance (ESG) Awards 2025 in Ho Chi Minh City, Vietnam. The International Finance Awards organised by International Finance Publications Ltd recognise industry workforce, leadership skills, industry networth and capabilities on an international platform, particularly in Asia and Europe. Meanwhile, the Annual Global CSR and ESG Awards organised by The Pinnacle Group International recognise companies for outstanding world-class products, services and programmes. As a development financial institution, Bank Rakyat said it believes that it should play an important role in fostering economic and social well-being. The recognition also motivates it to continue to increase the positive impact on the private sector and local community, it said. “In the future, Bank Rakyat is dedicated to continuing to integrate sustainability in all operations and business strategies of the bank, while intensifying efforts to develop new solutions and collaborate with strategic partners and related institutions to catalyse positive social impact. “The implementation of Community Outreach initiatives that are planned throughout the year such as the Kebun Nuri Nutrisi programme and the BaktiRAKYAT voluntary initiative are Bank Rakyat’s main agenda in improving community welfare and meeting the current socio-economic needs of the needy, especially among the unserved and underserved groups,” it said. – Bernama

growth while maintaining independence, accountability, and adherence to their investment objectives. Temasek was recently recognised by Global SWF for its high level of transparency. Quoting the Global Sovereign Wealth Fund (Global SWF), Elsa said GIC Singapore received mid-range scores, while Khazanah showed marked improvement since 2021. She said SWFs such as GIC, Khazanah, and Indonesia’s INA have demonstrated resilience but can improve in areas such as board selection disclosure, sustainability approaches, and crisis-prevention measures. On challenges, Elsa said SWFs must balance domestic investments with international diversification. She said diversification

SWFs’ investments over the long term,” Elsa said. When asked how SWFs leverage emerging technologies like artificial intelligence (AI) and blockchain to enhance transparency and improve investment decision-making in 2025, Elsa pointed out that Norway’s SWF uses AI to deploy capital. “As they are a near-indexed fund, AI helps determine the most efficient way to make these adjustments with the fewest trades, which reduces trading costs. “Other SWFs have not disclosed these measures,“ Elsa said. She said the International Forum of Sovereign Wealth Funds (IFSWF) held its recent gathering in November 2024, and the members agreed to use AI in their investment processes. This will improve decision-making as AI enables investors to process large, less structured and complex datasets and provide insights that previously took much longer to process. Further, this will also enable the SWFs to detect emerging trends quickly and increase transparency as conflicts of interest or ESG tracking in their investment portfolios can be identified. Elsa also elaborated on strategies regional SWFs should adopt to align with global sustainability goals and address climate related investment risks. She said there is a natural alignment between SWFs and sustainability goals, especially climate-related risks. “SWFs are owned by governments, and initiatives such as the Sustainable Development Goals are aligned with the role of governments. “Recognising that extreme weather events can disrupt economies, infrastructure, and social stability, most SWFs have integrated Environmental, Social, and Governance (ESG) factors into their investment strategies. “Despite recent uncertainties, such as the exit of major investors from the NZAM initiative, maintaining a steady commitment to ESG practices is crucial as climate-related events are expected to increase.”

KUALA LUMPUR: Effective governance and transparency are essential for sovereign wealth funds (SWFs), as they play a critical role in fostering public trust, ensuring accountability, and implementing safeguards against malfeasance that could undermine long-term stability and legitimacy. Asia School of Business ensure that SWFs effectively fulfil their responsibility to manage national wealth for current and future generations. “Public confidence hinges on the professionalism and independence of SWF management. Transparent and accountable governance structures are necessary to protect against financial mismanagement and political interference,” she told SunBiz . She said SWFs manage over US$11 trillion in global assets. Elsa said SWFs play a vital role in ensuring economic stability and wealth creation by making strategic investments that safeguard prosperity for current and future generations. She pointed out that Malaysia’s Khazanah Nasional Bhd and Singapore’s Temasek Holdings Ltd balance investments for financial returns with contributions to socioeconomic development. Both agencies operate across domestic and international markets to foster economic o Public confidence hinges on professionalism and independence of SWF management, says don director and senior lecturer Elsa Satkunasingam ( pic ) said clear governance processes help

enhances portfolio returns and mitigates domestic risks, but prioritising socioeconomic development through domestic investment is also critical. Commenting on strategies regional SWFs should adopt to align with global sustainability goals and address climate related investment risks, Elsa said there is a natural alignment between SWFs and sustainability goals, especially climate-related risks.

She said SWFs are owned by governments, and initiatives such as the Sustainable Development Goals are aligned with the role of governments. “Recognising that extreme weather events can disrupt economies, infrastructure, and social stability, most SWFs have integrated Environmental, Social, and Governance (ESG) factors into their investment strategies. “Despite recent uncertainties – such as the exit of major investors from the Net Zero Asset Managers (NZAM) initiative – maintaining a steady commitment to ESG practices is crucial as climate-related events are expected to increase and adhering to its ESG strategies will

Public-private partnership strengthens sustainable manufacturing

sustainability our manufacturers can unlock new market opportunities, strengthen their position in the global supply chain, and elevate Malaysia as a responsible and innovative manufacturing hub.” FMM vice-president Jacob Lee added that the pilot programme would allow selected FMM members to implement and test advanced digital solutions to track carbon emissions, improve ESG reporting, and align with international sustainability standards. “To ensure broader participation, MIDA’s Domestic Investment Accelerator Fund, launched last year, will help reduce subscription costs for FMM members. “DIAF is a matching grant initiative designed to support Malaysian-owned SMEs and mid-tier companies in the manufacturing and selected services sectors,” he remarked. The Microsoft Cloud for Sustainability platform aims to enable manufacturers transition to data-driven ESG practices by providing access to Al-powered sustainability tools. performance,

Banking & Finance “With multinational companies prioritising ESG compliance, local manufacturers must adopt sustainable practices to maintain market access and attract new business opportunities. “Digital solutions focused on ESG should go beyond regulatory compliance and instead be seen as a involved. They have worked tirelessly to make this partnership a reality, one that Malaysia can take pride in, bringing together expertise, technology, and the right industry support to create meaningful change in the manufacturing sector,” he said at the launch of the ESG Public-Private Partnership, recently. He added that, by leveraging advanced digital tools and artificial intelligence (AI) to automate processes and enhance productivity, manufacturers can improve ESG reporting, track carbon emissions, and optimise resource usage to strengthen their sustainability efforts. “Malaysia’s digital economy must align with international sustainability benchmarks to ensure our industry remains competitive in the global supply chain.

Ű BY AIMIE SHAZRIE sunbiz@thesundaily.com

PETALING JAYA: Glocomp Systems (M) Sdn Bhd, ICT solutions provider in Malaysia, spearheaded a strategic collaboration with key industry stakeholders to drive sustainability adoption in the manufacturing sector. The partnership includes the Federation of Malaysian Manufacturers (FMM), the Malaysian Investment Development Authority (Mida), the Malaysia Digital Economy Corporation (MDEC), and Microsoft Malaysia, with support from the Digital Ministry. All parties share a common goal of empowering manufacturers with digital solutions to enhance environmental, social and governance (ESG) practices. Digital Minister Gobind Singh Deo said the initiative is a crucial step in integrating digital innovation with sustainability efforts in the nation’s manufacturing sector. “This strategic public-private collaboration is the result of the dedication and commitment of all

Gobind with (from left) Malaysia ESG Association president Cheah Kok Hoong, MDEC vice-president and head of digital Wan Murdani Wan Mohamad, Glocomp executive director Alex Liew, Giam, Si, Microsoft Microsoft cross and sustainability solutions lead Pen Lewin and Lee.

director Joseph Giam said adopting globally recognised ESG best practices would enhance manufacturers’ competitiveness in key export markets. “The true goal of ESG is to act as a catalyst for sustainable growth and long-term business resilience. “By integrating digital solutions to measure, track, and optimise

strategic investment for the future of Malaysia’s industry. “By harnessing technology to drive sustainability, Malaysia reinforces its position as a leader in responsible manufacturing, enhancing its reputation as a forward-thinking and globally connected economy,” he said. Meanwhile, Glocomp managing

Education News/Health & Wellness TUES

ESG

Property

WED

MON

THUR