KUALA LUMPUR – Permodalan Nasional Bhd (PNB) has recently announced a new framework for sustainability to define and internalise its goals for a sustainable future in the midst of a shifting global investment market.
Its president and group chief executive officer Ahmad Zulqarnain Onn stated that the framework highlights all of PNB’s efforts over the previous years in the different areas of sustainability and brings it together in a comprehensive plan.
This plan has 10 commitments for operations and investments divided into the three different pillars of Environmental, Social, and Governance (ESG).
For the Environment pillar, Ahmad Zulqarnain explained that PNB wants to align its efforts to support Malaysia’s transition towards a green economy with three commitments which are net zero enterprise by 2025, net zero portfolio by 2050 and also an investment of RM10 billion in green and transition assets by 2030.
Speaking at a virtual media conference on the launch of PNB’s sustainability framework, he said, “Overall, PNB’s investment will be driven by asset allocation, which is in the research process (and) will take into account issues of sustainability.”
As for the Social pillar, PNB’s objective is to increase wealth through addressing equity and inclusion issues while balancing its profits with social investments.
Meanwhile as a government-linked investment company, PNB advocates for sound governance practices as part of their commitment to the Governance pillar. It intends to create a “triple bottom line stewardship model” to drive transparency particularly in voting and ensuring the reporting disclosures are in line with the climate-related financial disclosures task force.
He noted that there is high demand on companies nowadays to not only perform financially but also to include ESG practices into their businesses.
“We think that this new manner of doing business would provide considerable benefits for PNB, investee firms, partners as well as other stakeholders and millions of Malaysians who have entrusted us with their investments via our collaborative efforts,” he added.
According to Ahmad Zulqarnain, due to the focus on ESG, it is expected to yield better returns for unit holders in the years to come as previous studies have shown that organisations with a triple bottom line model fare better than those that do not address ESG issues.
Also as part of the framework, PNB established two new divisions which are the investment stewardship division and the enterprise sustainability department. Both divisions will be responsible for the overall implementation of the framework.
Tun Arifin Zakaria, the PNB group chairman, stated that the corporation has an obligation as one of Malaysia’s largest fund management institution to help navigate through the complexities of the ESG journey. PNB has approximately 10% of its assets invested in local companies listed on Bursa Malaysia.
Furthermore, Tun Arifin said “We believe more can be achieved collaboratively and PNB will play an active role in creating awareness and a deeper understanding of ESG, and how to best practice ESG for sustainability.”
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