EPF working on ESG stewardship policy for investee companies

KUALA LUMPUR – With the focus on environmental, social and corporate governance (ESG), the Employees Provident Fund (EPF) is in the process of adding finishing touches to a stewardship policy in order to address investee companies that do not comply with the ESG standards.

The fund’s chief strategy officer, Nurhisham Hussein, explained that the policy would address the level of involvement and the actions which the EPF would take if a company does not comply with the ESG standards.

“I hope that we will be able to issue the policy some time over the course of the next few years,” he said.

The stewardship policy would allow for people to at least be able to comprehend the repercussions of not complying while at the same time also learn of the channels they can use to communicate with EPF as well as other large investors if there were specific issues that needed to be addressed, he added.

The remarks were made by Nurhisham during the Sustainable and Responsible Investment (SRI) Virtual Conference 2022 held on June 23. The title of the conference is ‘Preserving the Climate through Sustainable Business and Living.’

The Sustainable Investment Policy, Priority Issues Policies, and Priority Sector Policies were all introduced by the pension fund in March of this year. These policies are intended to act as a guideline for the EPF in the process of making informed decisions by incorporating ESG standards.

These initiatives are in line with the pension fund’s commitment to two overarching sustainable investment ambitions which will act as a guide in EPF’s overall sustainability pursuit.

The ambitions that were set are to achieve a fully ESG-compliant portfolio by the year 2030 as well as a climate-neutral portfolio by the year 2050. Both of these ambitions are in line with the aspirations set by the 12th Malaysia Plan to make Malaysia a carbon neutral country.

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