KUALA LUMPUR: The Employees Provident Fund (EPF) has set a precedent in Malaysia by unveiling its Sustainable Investment Stewardship Policy, marking a significant milestone as the country's first institutional investor to do so.

According to EPF, the policy outlines the processes and guidelines the EPF follows to promote good sustainability practices among its investee companies and external fund managers.

The fund said the stewardship undertaking has strengthened the EPF's commitment to help build a better retirement future for Malaysians by delivering long-term sustainable value. 

"This aligns with the United Nations-supported Principles for Responsible Investment (PRI), which define stewardship as institutional investors using their influence to maximise overall long-term value," it said. 

EPF chief executive officer Ahmad Zulqarnain Onn said the fund believes that sustainable investment is key to creating long-term value for Malaysia. 

As a responsible institutional investor, Zulqarnain said EPF is committed to advancing this principle by systematically promoting and instilling good business practices that incorporate environmental, social, and governance (ESG) factors into all investment decisions.

"This stewardship commitment accelerates the EPF's progress towards achieving a fully ESG-compliant portfolio by 2030 and a climate-neutral portfolio by 2050. 

"We aim to empower our investee companies and EFMs to generate positive societal and environmental impacts, keeping all stakeholders' best interests in mind, while maximizing portfolio-level risk-adjusted returns," he said. 

As the largest institutional investor in Malaysia, the EPF is taking a leadership role to influence the adoption of good sustainability practices within the Malaysian capital market, whether individually or collaboratively through platforms such as the Institutional Investors Council (IIC).

The EPF Sustainable Investment Stewardship Policy covers approaches to key stewardship areas. 

This includes monitoring, engagement and escalation options, in efforts to align companies with its sustainable investment policies and improve management of material ESG risks and opportunities. 

The EPF's stewardship philosophy is centred on four key activities, namely proxy voting, monitoring, active engagement and collaborative initiatives.

https://www.nst.com.my/business/corporate/2024/07/1077650/epf-launches-countrys-first-sustainable-investment-stewardship