The $32 billion Kumpulan Wang Persaraan (KWAP), Malaysia’s second-largest pension fund, has become the first fund in the country to join the United Nations-supported Principles for Responsible Investing (PRI).
As a PRI signatory, the fund will team with the group to build a “sustainable and economically effective financial system,” continuing its dedication to supporting and promoting environmental, social, and governance (ESG) practices. This includes publically reporting on its investing procedures in accordance with the PRI’s six core principles, which read as follows on the PRI website:
- Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes.
- Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.
- Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.
- Principle 4: We will promote acceptance and implementation of the Principles within the investment industry.
- Principle 5: We will work together to enhance our effectiveness in implementing the Principles.
- Principle 6: We will each report on our activities and progress towards implementing the Principles.
“At KWAP, we believe our focus is directed towards adopting upright ESG practices, to not only improve long-term social security to pensioners, but also our duty to future generations. Being the first pension fund in Malaysia to hold our pledge towards the PRI is in line with our effort in environmental, social, and governance (ESG) initiatives. It also further reiterates and demonstrates our commitment towards responsible investing,” Dato’ Wan Kamaruzaman Wan Ahmad, KWAP CEO, said in a statement.
The PRI principles are also inline with KWAP’s own forward-thinking ESG guidelines, known as KWAP’s Investment Policy and Guidelines and KWAP’s ESG Guidelines for Investment. In addition to its ESG-Based Research Methodology, KWAP has also integrated ESG in nearly every facet of its business, developing fixed income, equity investment, and even corporate-level ESG guidelines.
“We congratulate KWAP as an early adopter of responsible investing in the region, and as one of the first pension fund signatories in ASEAN,” Fiona Reynolds, PRI’s managing director said in a statement. “I am truly honoured to be able to be in Malaysia for the formal announcement. The commitment of KWAP to take a leading role in the region should be commended and our hope is that their leadership will inspire other pension funds to be proactive in incorporating sustainability factors in their investment process.”
Last year, KWAP hosted the International Corporate Governance Network (ICGN) Annual Conference, which reflected on redefining capitalism for a sustainable global economy as well as governance priorities in major Asian markets. The fund is organizing an environment-themed conference for July, to be held in tandem with sustainability and responsible business events scheduled to take place in Kuala Lumpur.