KUALA LUMPUR (Aug 6): The Retirement Fund Inc (KWAP) has reinforced its commitment to sustainable investment by pledging to increase its focus on transition assets to RM20 billion.

Its chief executive officer (CEO) Datuk Nik Amlizan Mohamed highlighted that at KWAP, environmental, social and governance (ESG) principles underpin both community outreach and investment strategies.

She said the fund is committed to championing ESG principles with clear targets, including substantial investments in renewable energy (RE) projects, sustainable infrastructure and innovative clean technologies.

“Our goal is to drive meaningful changes in the transition to a sustainable economy, while ensuring strong returns for our stakeholders.

“Beyond investments, we are also implementing comprehensive sustainability programmes within our organisation, such as reducing our carbon footprint and promoting environmental awareness among our employees and stakeholders,” she said in a statement released at the KWAP Inspire 2024 Conference on Tuesday.

Nik Amlizan noted that, as Malaysia’s largest pension fund for civil servant retirees, KWAP is charged with generating optimal, sustainable, risk-adjusted long-term returns for the fund.

By actively seeking opportunities to invest in companies and projects aligned with specific themes, she said KWAP aims to deliver significant social and environmental impacts, alongside financial returns.

The conference, themed “Advancing Circular Transformation for a Climate-Smart Malaysia”, brought together key stakeholders from the public sector, financial industry, and sustainability experts to explore strategies for building a secure, equitable, inclusive and sustainable future for all Malaysians, with a focus on the circular economy.

Additionally, KWAP introduced its inaugural 2023 Sustainability Report at the conference.

The report outlined KWAP’s commitment to establishing itself as a leader in sustainability through five key pledges: advocating for social agendas, empowering partnerships for collective action, achieving a net-zero portfolio by 2050, increasing investment in transition assets to RM20 billion by 2030, and enhancing sustainability governance.

“This commitment reflects our belief that financial success and societal progress are intrinsically linked.

“As we move forward, KWAP will continue to lead by example, demonstrating that responsible investing is not only ethically sound but also economically prudent in our rapidly evolving global landscape,” she added.

Meanwhile, Finance Minister II Datuk Seri Amir Hamzah Azizan announced in his speech that the ministry is spearheading a key initiative involving KWAP and other government-linked investment companies, including Khazanah Nasional Bhd, the Employees Provident Fund (EPF), Lembaga Tabung Haji (LTH), and Lembaga Tabung Angkatan Tentera (LTAT).

“This programme aims to leverage the collective strength and investment capacity of the country’s key institutional investors to achieve the Ekonomi Madani aspiration of building a better Malaysia,” he said.

The minister emphasised that this collaboration will enhance momentum, reduce overlaps and resource wastage, and ultimately strengthen the impact on targeted outcomes.

“We cannot afford to delay our actions, as the potential loss may amount to nearly 10% of Malaysia’s gross domestic product (GDP) by 2050.

“The road ahead will not be easy, but a sustainable future for Malaysia is worth the difficult decisions that must be taken now,” he said.