(15 May 2018, Kuala Lumpur) The United Nations Sustainable Stock Exchanges (SSE) initiative presented its voluntary green finance action plan at an event at the Malaysian Securities Commission aimed at exploring the use of Islamic Finance to support climate mitigation and adaptation efforts. The conference titled “Harnessing Islamic Finance for a Green Future” was organized by the Securities Commission of Malaysia, the World Bank Group, and the International Organization of Securities Commission (IOSCO) Asia Pacific Hub Malaysia.
“Green finance and greening financial markets more generally are critical components of global efforts to both mitigate and adapt to the effects of climate change,” said Tiffany Grabski, Deputy Coordinator of the UN SSE initiative. “The work of the Islamic Finance community in this area is an important contribution to efforts to build more environmentally sustainable economies worldwide.”
Tan Sri Ranjit Ajit Singh, Chairman of the Malaysian Securities Commission said, “Innovations in the use of Islamic financial instruments can go a long way in supporting sustainable development. In line with rising demand, the Malaysian Securities Commission continues to facilitate the development of the ecosystem and products that meet the requirements of both SRI and Islamic finance, ensuring the capital market serves the needs of investors and issuers.”
The event took place over a day and a half on 14-15 May, with panels discussing the development of Islamic Finance broadly, and how it aligns with the objectives of “green finance” more specifically, as well as the development of green guidelines and standards, green bond or sukuk experiences, policy and incentives for green growth, engaging the private sector, and the prospects for Islamic green finance.
The SSE green finance action plan identifies two main action areas that stock exchanges should work on in parallel. First, the promotion of green labelled products and services helps direct funding towards green projects and environmentally aligned issuers (action area 1). Secondly, more systematic and holistic changes must take place to support a green transition and ensure market resilience to the economic impacts of climate change (action area 2).
In addition to these two main action areas, the guidance also identifies two crosscutting action areas that will facilitate green finance efforts in the first two action areas: strengthening the quality and availability of climate related and other environmental disclosure among issuers and investors (action area 3); and contributing to the growth of dialogue and consensus building on green finance with other capital market participants (action area 4). Throughout all four of these action areas, partnerships are key.
About the Sustainable Stock Exchanges initiative
The SSE provides a peer-to-peer learning platform for exploring how exchanges—in collaboration with investors, regulators, and companies—can encourage sustainable investment and enhance corporate transparency, and ultimately performance, on ESG (environmental, social and corporate governance) issues. The SSE is a United Nations Partnership Programme convened by the UN Conference on Trade and Development (UNCTAD), the UN Global Compact, the UN Environment Finance Initiative (UNEP FI), and the Principles for Responsible Investment (PRI). For more information on specific exchanges’ sustainability efforts, how to become a Partner Stock Exchange, and further opportunities to advance the integration of sustainability within capital markets, visit www.sseinitiative.org