US$1.8b SRI sukuk issued under Malaysia SRI Sukuk Framework since 2014 – SC

by BERNAMA / pic by MUHD AMIN NAHARUL

KUALA LUMPUR – Since 2014, approximately US$1.8 billion of Sustainable and Responsible Investment (SRI) sukuk have been issued under Malaysia’s SRI Sukuk Framework as at Oct 11, 2021, said Securities Commission Malaysia (SC) chairman Datuk Syed Zaid Albar.

He said issuances have covered a variety of green and social projects, ranging from solar power and sustainable natural resource management, to green buildings and trust schools.

“To manage sustainability transitions, we believe that Islamic bonds or sukuk are an effective funding instrument.

“Sukuk has much more to offer. It encourages the use of new and sustainable approaches, such as funding the deployment of low carbon technologies as well as contribute to the growth of transition finance,” he said in his opening address remarks at the virtual Sustainable Finance Week Expo 2020 Dubai here today.

Syed Zaid said the Islamic finance sector could play a truly pivotal role to drive sustainable development as it is founded on the principles of equity and sustainability.

He believed it is time for sustainable development to be prioritised and the emphasis needs to lean towards achieving better social outcomes, while preserving environmental integrity.

“We believe that Islamic finance is well suited to provide the requisite innovation and financial solutions for the challenges the world is facing today,” he said.

He said the sustainable finance bonds have raised a record US$778 billion during the first nine months of this year, a 57 per cent increase from 2020, and nearly half of these bonds are green bonds.

Within Southeast Asia, bonds and sukuk issued under the ASEAN Green, Social and Sustainability Bond Standards amounted to US$16.7 billion whereby one fifth of these issuers are Malaysian entities, he said.

For Malaysia, he said sustainability has been a long-standing tenet of our Islamic capital market, which was established about 30 years ago.

“Over these three decades, we have experienced first-hand the benefits of sustainable financing and investments.

“As such, we have continued to introduce dedicated product frameworks and guidelines to encourage product innovation even further to provide a vibrant SRI ecosystem,” he added.