SUSTAINABILITY REPORT 2022
INSIDE THIS REPORT SECTION 1 Reporting Scope and Boundaries 3 Guidelines and Standards 3 ABOUT THIS REPORT SECTION 2 Our Locations 4 Our Network at a Glance 4 Our Corporate Structure 5 Our Core Business Segments 6 Our Brand Values 7 Leadership Statements 8 WHO WE ARE SECTION 3 Our Key Milestones 14 Our Contribution to UN SDGs and UN Global Compact’s Ten Principles 16 Our ESG Framework 19 An Insight into Our Stakeholder’s Perspectives 20 What is Material to Us 21 Our Sustainability Goals and Roadmap 23 PROGRESSING TOWARDS A SUSTAINABLE FUTURE SECTION 4 Response to ESG and Climate Risks 25 Our Approach 25 Key Emerging Risks 25 MANAGING OUR SUSTAINABILITY RISKS SECTION 5 Good Business Conduct 34 Regulatory Compliance 37 GOOD GOVERNANCE SECTION 6 Responsible Investing 44 Digitalisation 49 Cyber Security 55 Client Experience 58 SUSTAINABLE ECONOMIC GROWTH SECTION 7 Managing Our Climate Impact 61 ENVIRONMENTAL STEWARDSHIP SECTION 8 Diversity and Inclusion 68 Employee Health, Safety and Wellbeing 73 Talent Attraction, Development & Management 75 Community Investment 84 EMPOWERING PEOPLE AND COMMUNITIES SECTION 9 Our Notable Recognitions in 2022 89 AWARDS AND RECOGNITIONS SECTION 11 GRI Content Index 94 GRI CONTENT INDEX Cover Rationale At Kenanga, we uphold four core values: agility, collaboration, trustworthiness, and future facing. These values underpin our dedication to building a strong and resilient organisation that can navigate the challenges of the ever-evolving financial landscape. Our commitment to these values empowers us to remain agile in our approach, collaborate effectively with colleagues and partners, maintain the highest standards of trustworthiness, and remain future facing by actively seeking out new opportunities in digital innovation for financial inclusion. The paragliding image on our Sustainability Report’s cover symbolises our commitment to taking calculated risks in the pursuit of success, and our willingness to explore uncharted territory. Despite the inevitable ups and downs of the financial world, we remain dedicated to doing what is best for our organisation and our stakeholders. We continuously push boundaries, innovate, and pursue new opportunities for growth and value creation. Annual Report Provides an overview of Kenanga Group’s financial performance, as well as business highlights of the year. Corporate Governance Report Provides an overview of Kenanga Group’s corporate governance and how it facilitates effective management to deliver long-term value for the company. Sustainability Report Provides an understanding of Kenanga Group’s sustainability ambitions, initiatives and progress, as well as how it is integrated across the business. SECTION 10 ESG Performance Data 91 ESG PERFORMANCE DATA 49th ANNUAL GENERAL MEETING Kenanga is committed to making a difference in the environment. Play your part by opting to download a softcopy of our reports at https://www.kenanga.com. my/investor-relations/AGM2023 or by scanning the QR code above. Date : Thursday, 25 May 2023 Time : 11.00 a.m. Venue : Level 19, Kenanga Tower, 237, Jalan Tun Razak, 50400 Kuala Lumpur, Wilayah Persekutuan, Malaysia The Annual Report 2022, Corporate Governance Report 2022 and Sustainability Report 2022 are our primary reports. Supplementary information are available on our website: https://www.kenanga.com.my Our Reports
2 3 Environmental Stewardship About This Report Who We Are Progressing Towards A Sustainable Future Managing Our Sustainability Risks Good Governance Sustainable Economic Growth Awards and Recognitions Empowering People and Communities KENANGA INVESTMENT BANK BERHAD Sustainability Report 2022 GRI Content Index ESG Performance Data ABOUT THIS REPORT Reporting Scope and Boundaries The contents of this Report encompass full year data for the fiscal year ending in December 2022, from 1 January 2022 to 31 December 2022 (“2022” or “FY2022”), which cover our operations in Malaysia, including our Kuala Lumpur-based headquarters, Kenanga Tower and branch offices nationwide. All monetary values are reported in Malaysian Ringgit (“RM”) and this Report should be read in conjunction with our Annual Report 2022. Guidelines and Standards This Report complies with Bursa Malaysia’s Main Market Listing Requirements and has been prepared in reference with the Global Reporting Initiative (“GRI”) Standards. The GRI Content Index can be found on pages 94-96. We have further aligned our ESG disclosures with the following: • Bursa Malaysia Securities Berhad (“Bursa Securities”) Sustainability Reporting Guide (3rd Edition) • United Nations Sustainable Development Goals (“UN SDGs”) • Recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”) • Joint Committee on Climate Change (“JC3”)’s TCFD Application Guide for Malaysian Financial Institutions • Bank Negara Malaysia’s Climate Change and Principle-based Taxonomy (“BNM CCPT”) • United Nations Global Compact (“UNGC”)’s Ten Principles The Report also serves as a Communication on Progress (“CoP”) report as part of our commitment to UNGC. In preparation of this Report, the ESG performance and disclosures were also benchmarked against internationally recognised ESG ratings and frameworks, primarily focusing on FTSE Russell’s ESG Ratings and industry-relevant Sustainability Accounting Standards Board (“SASB”) indicators, which provide guidance in improving our reporting transparency and disclosures whilst reinforcing our sustainability strategies and direction. The GHG emissions were calculated using an international assurance standard, the GHG Protocol Corporate Standard, developed by the World Business Council for Sustainable Development and the World Resources Institute (“WBCSD/ WRI”). ABOUT THIS REPORT Report Assurance The Group Sustainability Management Committee, Group Governance Nomination & Compensation Committee, Audit Committee, and the Board of Directors have internally reviewed, assured and approved the Sustainability Report 2022 and Sustainability Statement 2022. We are continuously refining our data collection process to enhance our disclosures in future reports. Moving forward, we aim to seek assurance for our sustainability reporting and statement. Forward-Looking Statements Disclaimer This Report contains certain forward-looking statements relating to future performance where such statements are premised on current assumptions and circumstances, which could change due to various reasons, such as shift of stakeholders’ ESG priorities. Various factors could cause actual results to differ materially from those expressed or implied by these forward-looking statements. As such, the forward-looking statement will be reviewed for its relevancy in our upcoming reports as needed. Feedback and Accessibility We welcome all feedback and comments, kindly direct them to: Group Chief Sustainability Officer, Group Marketing, Communications and Sustainability Kenanga Investment Bank Berhad Level 17, Kenanga Tower, 237, Jalan Tun Razak, 50400 Kuala Lumpur, Wilayah Persekutuan, Malaysia Tel : +603-2172 2888 Email : [email protected] Our Sustainability Report 2022 is also available on our corporate website (https://www.kenanga.com.my/who-we-are/sustainability). Kenanga Investment Bank Berhad (“Kenanga”, “the Group” or “Kenanga Group”) presents our second standalone Sustainability Report 2022 (“the Report”), complementing our brief Sustainability Statement within our Annual Report 2022. This report provides a detailed overview of our approach towards managing our stakeholder-relevant environment, social and governance (“ESG”) topics, goals and performance. We have outlined our progress in integrating sustainability into our strategies, business practises, products, and services to provide long-term value to our stakeholders as we continue to innovate the investment banking landscape. Following the release of our inaugural Sustainability Report in 2021, further enhancements have been made in this year’s disclosures which include Scope 1 and 2 Greenhouse Gas (“GHG”) emissions data inclusive of branch offices nationwide, Scope 3 disclosure on business travel and the inclusion of a new material topic which is Employee Health, Safety and Wellbeing into our materiality assessment. Scan here to our sustainability microsite for more information and downloads.
4 5 Environmental Stewardship About This Report Who We Are Progressing Towards A Sustainable Future Managing Our Sustainability Risks Good Governance Sustainable Economic Growth KENANGA INVESTMENT BANK BERHAD Sustainability Report 2022 Awards and Recognitions Empowering People and Communities GRI Content Index ESG Performance Data WHO WE ARE CORPORATE STRUCTURE As part of our continued pursuit of innovation and transformation in the digital environment, we continue to strive for greater heights as the nation’s leading stockbroker with the largest remisier network. As a leading investment institution, we have positioned our unwavering commitment to drive market collaboration, innovation, and digitalisation. In this new era of finance centered on digitalisation and new technologies, it is vital that we continue to reimagine and reshape our products and offering, to meet the demands and expectations of our clients and the market. As we move forward, we will continue to tap into data-driven insights around clients, as well as business behaviours and needs to guide decision-making and our processes. Our efforts to integrate inclusivity to our investment and wealth management products and services, have led to the development of creative solutions that enable democratisation of access such as, Malaysia’s first fully online stock trading platform, Rakuten Trade which is a joint venture with Japan-based Rakuten Securities Inc., as well as Kenanga Digital Investing (“KDI”), a fully artificial intelligence (“A.I.”)- driven Robo-advisory platform launched in 2022. We are currently developing Malaysia’s first Wealth SuperApp and look forward to its rollout in 2023. Kenanga Investment Bank Berhad is a leading, independent, Malaysianbased investment bank established in 1973. We have provided awardwinning products and services to clients and businesses for almost five (5) decades, through our wealth of experience in equity broking, investment banking, treasury, Islamic banking, listed derivatives, investment management, wealth management, structured lending and trade financing. OUR NETWORK AT A GLANCE Employees Over 1,300 Branches 34 Branches Kenanga Investment Bank Berhad Kenanga Investors Group HQ Sabah 1 1 Sarawak 2 2 Perak 1 1 Pahang 2 1 Negeri Sembilan 1 1 Penang 1 1 Selangor 4 4 Kuala Lumpur 1 1 1 Malacca 1 1 Johor 5 1 FINANCIAL PERFORMANCE Revenue (RM million) 2022 723.1 2021 891.5 Profit Before Tax (RM million) 2022 74.2 2021 148.2 Net Profit (RM million) 2022 55.4 2021 118.8 Clients Over 500,000 Licensed Representatives over 6,500 Note: All the above companies are incorporated in Malaysia except for Kenanga Investment Corporation Ltd, Al Wasatah Al Maliah Company and Rakuten Trade Singapore Pte Ltd. 100% Kenanga Islamic Investors Berhad Registration No. 199701036457 (451957-D) 100% Kenanga Investors Berhad Registration No. 199501024358 (353563-P) 100% Kenanga Futures Sdn Bhd Registration No. 199501024398 (353603-X) 100% Kenanga Capital Sdn Bhd Registration No. 199701024604 (440102-V) 100% Kenanga Private Equity Sdn Bhd Registration No. 199701007563 (423059-P) 50% Rakuten Trade Sdn Bhd Registration No. 199301011963 (266701-P) 50% Rakuten Trade Singapore Pte Ltd (Incorporated in Singapore) Registration No. 201433886E 29.6% Al Wasatah Al Maliah Company (Incorporated in the Kingdom of Saudi Arabia) Registration No. 1010241832 100% K & N Kenanga Holdings Berhad Registration No. 199401017181 (302859-X) 100% Kenanga Nominees (Tempatan) Sdn Bhd Registration No. 197301003326 (16778-M) 100% Kenanga Nominees (Asing) Sdn Bhd Registration No. 199301025305 (280043-U) 100% Kenanga Management & Services Sdn Bhd Registration No. 198001007478 (61262-V) 100% ECML Berhad Registration No. 193001000016 (682-X) 100% Kenanga Digital Sdn Bhd (Formerly known as ECML Nominess (Tempatan) Sdn Bhd) Registration No. 193801000015 (938-T) 100% Avenue Kestrel Sdn Bhd Registration No. 198301001914 (97150-A) 100% SSSB Management Services Sdn Bhd Registration No. 199101009010 (219322-W) 45% Kenanga Investment Corporation Ltd (Incorporated in Sri Lanka) Registration No. PB300 100% I-VCAP Management Sdn Bhd Registration No. 200701034939 (792968-D) 100% KUT Nominees (Asing) Sdn Bhd Registration No. 200201001939 (569602-K) 100% KUT Nominees (Tempatan) Sdn Bhd Registration No. 200201001942 (569605-D) 100% Kenanga Funds Berhad Registration No. 200301017657 (620077-K) 20% Kenanga Capital Islamic Sdn Bhd Registration No. 201101010778 (938908-X) Kenanga Investment Bank Berhad Registration No. 197301002193 (15678-H)
6 7 Environmental Stewardship About This Report Who We Are Progressing Towards A Sustainable Future Managing Our Sustainability Risks Good Governance Sustainable Economic Growth KENANGA INVESTMENT BANK BERHAD Sustainability Report 2022 Awards and Recognitions Empowering People and Communities GRI Content Index ESG Performance Data OUR CORE BUSINESS SEGMENTS OUR BRAND VALUES AGILITY We are nimble and quick to respond with creative, customised solutions to meet our stakeholders’ needs, both internally and externally. COLLABORATION We are supported by an integrated network of colleagues and partners. We believe in consolidating our knowledge and working together for the best solutions. TRUSTWORTHINESS Professionalism, integrity and transparency are values we hold dear. We are fully committed to ethical practices and strive to always maintain credibility in all that we do. FUTURE FACING We are constantly pushing boundaries. Our pursuit of digital innovations will drive financial inclusion and create opportunities and possibilities for our stakeholders. Kenanga provides a host of products and services to serve corporations, institutions, and individuals. We provide product and services to meet the investing and trading needs of retail and institutional investors, both domestic and international. These services consist of equity brokerage, global equity trading, structured warrants, equity structured solutions, and securities borrowing and lending. Equity Broking We provide Shariah-compliant investment banking services and products. All of Kenanga’s Skim Perbankan Islam and Islamic Stockbroking Window products are sanctioned by its Shariah Committee in accordance with regulatory mandates. Islamic Banking We offer a comprehensive array of treasury investment and hedging solutions. In addition, we have a team responsible for delivering inputs on indicative prices or levels and market updates for the money, fixed income, and foreign exchange market. Treasury We provide capital raising solutions and services such as corporate banking, corporate finance, debt capital markets, equity capital markets and private equity. Corporate Investment Banking We provide our clients access to trade on both Bursa Malaysia Derivatives Berhad (BMD) and Chicago Mercantile Exchange (CME) Group, the largest derivatives exchange in the world. Listed Derivatives We offer conventional and Shariah-compliant investment solutions, comprising collective investment schemes, private retirement schemes, portfolio management services, and alternative investments, to retail, corporate, and high-networth individual clients. Investment Management We provide financial instruments such as equity, structured finance, Islamic factoring, and Islamic margin financing. Structured Lending and Trade Financing
8 9 Environmental Stewardship About This Report Who We Are Progressing Towards A Sustainable Future Managing Our Sustainability Risks Good Governance Sustainable Economic Growth KENANGA INVESTMENT BANK BERHAD Sustainability Report 2022 Awards and Recognitions Empowering People and Communities GRI Content Index ESG Performance Data A YEAR OF ACTION Towards the end of 2021, Kenanga became Malaysia’s first investment bank to join the United Nations Global Compact (“UNGC”) Network, the largest voluntary corporate sustainability initiative in the world. Since then, we have made a commitment to enhance our value system and approach to doing business through the integration of the UNGC’s Ten Principles, which will provide an ethical foundation for all aspects of our business and operations. While 2021 was a year of laying our foundation, setting directions, computing baselines, prioritising gaps and marshalling resources, 2022 saw Kenanga accelerating in full speed to deliver with the aim of increasing our positive impact and creating long-term value for our stakeholders. I am proud to report that Kenanga made tremendous strides in carrying out our strategy, including the launch of three (3) ESG funds under the Kenanga Sustainability Series, reduction in carbon footprint, support of local communities through fund-raising and volunteerism, as well as raising awareness on mental health at the workplace. We have come to appreciate the crucial role that mental health plays in both personal and professional lives of individuals, and we aim to create an environment that is safe and supportive for our employees. One of the main priorities of the year was to accelerate employee awareness and understanding of sustainability issues relevant to our industry. UNGC sustainability learning modules were rolled out for all employees on the Kenanga Learning Management System, employee onboarding content was updated to include a sustainability component and bespoke workshops were run for Board members. The capacity building approach that was tailored and comprehensive, sparked engagement with over 95% of employees and was successful in fuelling effectiveness and momentum required to progress our ambition and agenda. Promoting ethics and good governance has been a cornerstone of our identity as a financial institution and this year, Kenanga rolled out the much-anticipated annual Fraud Awareness Week campaign to its largest audience yet. With zealous endorsement and participation from over 2,000 industry peers, regulatory representatives and our own valued employees, it is heartening to witness the profound impact of our advocacy efforts. The level of support and engagement from our stakeholders is a testament to the importance of ethics and good governance in the financial sector and reinforces our commitment to these principles. These are but some of the highlights of the year. Our sustainability initiatives are integrated into our business operations, and are carefully aligned with the United Nations Sustainable Development Goals (“UN SDGs”). The following pages within this Report provide a more comprehensive overview of our sustainability performance, and I invite you to go through it to learn more about our efforts. A SUSTAINABILITY ROADMAP As an extension of the Kenanga Sustainability Framework released the year before, the Group Sustainability Management Committee, chaired by Group Managing Director, Datuk Chay Wai Leong (“Datuk Chay”), initiated the development of Goals and Targets that were cascaded throughout the organisation. Elevating accountability and harmonising line of sight, the Board-approved goals and granular targets have now been integrated into relevant senior management team’s KPIs and Scorecards, facilitating and reinforcing a culture of sustainability. Underpinning this exercise is a three (3)-year Sustainability Roadmap, designed to reflect our strategic ESG priorities and focus areas. With this Roadmap, we now have a structured and cohesive approach for us to allocate resource, track and monitor performance, as well as communicate with our stakeholders. INDUSTRY ACCOLADES AND INCLUSION ONTO FTSE4GOOD INDEX Throughout the year, we were honoured to have been awarded multiple accolades from various institutions for our sustainability initiatives and achievements. UNGC Network Malaysia & Brunei (“UNGCMYB”) recognised us for our efforts in Sustainable Product; Partnership for Goals and Sustainability Awareness and Employee Engagement, and we also received Bank of the Year Award for ESG Excellence and Long-Standing Excellence in Sustainability from CSR Malaysia. CHAIRMAN’S MESSAGE CHAIRMAN’S MESSAGE I am pleased to present to you the Sustainability Report 2022, reflecting our continued commitment to environmental, social, and governance (“ESG”) initiatives and the progress we have made towards creating a sustainable future. We acknowledge that addressing ESG matters is not only crucial to our organisation’s success as a leading investment bank, but also significant for the overall wellbeing of the planet and its people. Our sustainability approach is reflected in our values and understanding of the complex economic, environmental, social, and governance challenges faced by our industry, communities, and the world at large. The implementation of an enterprise plan with integrated ESG aspects remains a priority for us, reflecting our commitment to responsible business practices. DEAR SHAREHOLDERS,
10 11 Environmental Stewardship About This Report Who We Are Progressing Towards A Sustainable Future Managing Our Sustainability Risks Good Governance Sustainable Economic Growth KENANGA INVESTMENT BANK BERHAD Sustainability Report 2022 Awards and Recognitions Empowering People and Communities GRI Content Index ESG Performance Data CHAIRMAN’S MESSAGE Q&A WITH OUR GROUP MANAGING DIRECTOR AND CHAIRMAN, GROUP SUSTAINABILITY MANAGEMENT COMMITTEE No doubt we have been accelerating our focus on sustainability in recent years, but ESG is not a new concept for us. As a homegrown brand that has evolved from strength to strength over the last 50 years, Kenanga’s pursuit of prosperity has always been balanced with a broader view of our impact. For example, we have always taken pride in having a diverse workforce and being fair and equitable to our employees; being a strong proponent of good governance; being a responsible environmental steward, as well as supporting marginalised communities where possible. Sustainability today is rapidly-evolving as the challenges facing local and global communities are increasingly complex and interconnected, but we remain committed to understanding the changing expectations, and to take necessary steps to drive a resilient and equitable future for all. How would you describe Kenanga’s sustainability commitment? 1 Further to this, in December, Kenanga gained inclusion onto the prestigious FTSE4Good Bursa Malaysia (“F4GBM”) Index, a globally recognised benchmark for companies that have demonstrated their commitment to ESG practices. We now join 10% of Malaysian public listed companies who are constituents on the Index. These recognitions are a testament to the hard work and dedication of our teams, who have been unwavering in their efforts to advance our ESG agenda, and it serves as a catalyst for us to continue pushing boundaries and setting new standards in this critical area. Our inclusion on the F4GBM Index and receiving these awards are noteworthy highlights, but we also recognise there is still more to be done and this is only the beginning. FORWARD MOMENTUM Looking ahead, we remain committed to continuing our progress and to working closely with our stakeholders to advance sustainability. Our sustainability strategy is a long-term journey, and we will continue to evolve and adapt as we learn and grow. I would like to extend my appreciation to the Group Sustainability Management Committee for their dedication and commitment under the leadership of Datuk Chay. I would also like to thank all our Board members, employees, clients, regulators, and all stakeholders for their ongoing support and engagement in our sustainability initiatives. Together, we can create a more sustainable future for all. TAN SRI DATO’ SERI SYED ZAINOL ANWAR IBNI SYED PUTRA JAMALULLAIL Chairman From devastating floods, to unprecedented forest fires around the world, climate change is a reality that has impacted millions of lives and an urgent threat that requires all parties – policy-makers, businesses, individuals – to take cohesive action. As one of Southeast Asia’s largest economies, regulators in Malaysia are accelerating the financial sectors’ response to climate risk and pace of transition, in order to support the country’s Net Zero target. In line with regulatory requirements, we are integrating climate risk assessments into our investment processes through the implementation of our Climate Change Risk Management Framework that is aligned to the Climate Change and Principle-Based Taxonomy issued by Bank Negara. In addition to that, our asset management division has been introducing several ESG funds from its Kenanga Sustainability Series. These funds are a suite of multi-asset products that integrate sustainability considerations with our oversight of the ESG integration strategy to advance long-term financial growth for investors. What are your thoughts about climate change and how is Kenanga responding to it? 2 DATUK CHAY WAI LEONG Group Managing Director Chairman, Group Sustainability Management Commitee
12 13 Environmental Stewardship About This Report Who We Are Progressing Towards A Sustainable Future Managing Our Sustainability Risks Good Governance Sustainable Economic Growth KENANGA INVESTMENT BANK BERHAD Sustainability Report 2022 Awards and Recognitions Empowering People and Communities GRI Content Index ESG Performance Data Q&A WITH OUR GROUP MANAGING DIRECTOR AND CHAIRMAN, GROUP SUSTAINABILITY MANAGEMENT COMMITTEE CONGRATULATORY NOTE FROM EXECUTIVE DIRECTOR, UN GLOBAL COMPACT MALAYSIA BRUNEI As of last year, we have implemented a data dashboard that facilitates a continuous monitoring of our progress across the organisation. In addition, we also have a set of Board-approved ESG goals and targets that are aligned to our Sustainability Framework and have been cascaded via relevant KPI owners and scorecard system. Ensuring continuous engagement with regulators, industry players and stakeholders is also critical to keep us abreast of best practices and industry standards that are rapidly evolving. It’s all about taking practical incremental steps, and a continuous review of our approach, progress and outcome to ensure our sustainability initiatives are effective and delivering value. How does Kenanga measure success of its sustainability initiatives and how does it plan to continuously improve in this area? 4 Our main focus includes reinforcing our three (3)-year Sustainability Roadmap, which lays out specific goals and targets that will drive our sustainable business practices forward. We also aim to advance financial inclusion and capital allocation through our products and value chain. While we recognise the urgency of upping our ante in ESG performance, we are also aware of the nuances of greenwashing and its consequences that have damaging impact. We need to tread carefully and to take on a comprehensive view of our actions and decisions. What can be anticipated from Kenanga with regards to sustainability in the coming year and what is the organisation’s direction in this area? 5 It has been encouraging to witness the significant strides taken by Kenanga to adopt sustainable and responsible business practises. At the UNGCMYB’s Sustainability Performance Awards in December 2022, we were pleased to recognise the impact they have delivered under three (3) categories. ‘Partnership for the Goals’ was a nod towards Kenanga’s collaborations with various organisations to drive different aspects of sustainability, especially by focusing on expanding financial inclusion through digitalisation. One of the highlights is their partnership with innovative technology provider, Ant Group to develop the country’s first Wealth SuperApp, which will further democratise access to the world of investing. Under ‘Sustainable Products’, Kenanga was awarded for its Kenanga Sustainability Series, a suite of multi-asset class products rooted in sustainability considerations that aims to advance long-term financial growth for investors while generating social and financial value for surrounding communities. One of the products under the Series is the World Quality ESG Fund, a feeder fund that invests in companies within the MSCI World Index that meets stipulated ESG criteria. Kenanga also received recognition for their efforts in promoting ‘Sustainability Awareness and Employee Engagement’. Our team at UNGC worked closely with Kenanga to integrate multiple online sustainability-related learning modules onto Kenanga’s Learning Management System, accelerating capacity building throughout the organisation and garnering up to 2,230 enrolments from employees across the company for two (2) UNGC’s e-learning modules on ‘How to Understand and Take Action on the Global Goals,’ and ‘Translating Human Rights into Business Practice.’ We are proud to have Kenanga as a key participant within the UNGC family in Malaysia and I have every confidence they will keep up the momentum to continue moving the needle within their organisation and the industry. Congratulations and well done, Kenanga! “We welcomed Kenanga Investment Bank Berhad into the UNGC’s Network towards the end of 2021. As the first investment bank in Malaysia to be part of the Network, it signalled a momentous commitment from the organisation to join the global movement towards realising the UN SDGs.” FAROZE NADAR Executive Director, UN GLOBAL COMPACT MALAYSIA BRUNEI (“UNGCMYB”) From automating energy-efficient systems in our premises that is reducing one third of our energy use, to introducing the first fully online stock trading platform in Malaysia that has unlocked financial inclusion amongst hundreds of thousands of first-time traders, we are strong advocates of embracing technology to drive innovation, efficiency and sustainable growth that benefit businesses, communities and environment. In 2022, we partnered with Ant Group, a globally recognised and experienced infrastructure and platform provider, to develop Malaysia’s first Wealth SuperApp. We look forward to not only unifying a broad spectrum of financial offerings under one (1) roof, but more importantly, to make wealth creation more accessible by democratising financial services for the millions of Malaysians around the country who want better, swifter and cheaper access to financial products and solutions. As we progress towards a future driven by digital innovation, cyber resilience has become increasingly critical to manage risks, data protection and stability of our operations. Unsurprisingly, cyber security emerged as the most material issue with all our stakeholder groups in our recent materiality assessment. Continuous review and reinforcement of our cyber security infrastructure, keeping a close eye on developments and threats in the digital sphere and enhancing the overall cyber security procedures of our operations, are at the core of our digital and technology strategy. How do you see innovation and technology playing a role in sustainability? 3
14 15 Environmental Stewardship About This Report Who We Are Progressing Towards A Sustainable Future Managing Our Sustainability Risks Good Governance Sustainable Economic Growth KENANGA INVESTMENT BANK BERHAD Sustainability Report 2022 Awards and Recognitions Empowering People and Communities GRI Content Index ESG Performance Data Our Key Milestones Performed our first materiality assessment to identify key focus areas that are significant to Kenanga and our stakeholders 2018 Expanded our ESG disclosures based on GRI standards, TCFD and aligned our performances based on UN SDGs 2020 Established Group Sustainability Plan Formulated ESG Integration Framework and Sustainability Blueprint First independent investment bank in Malaysia to be part of the UNGC Network Launched our first Kenanga Sustainability Series Introduced Kenanga ESG Framework PROGRESSING TOWARDS A SUSTAINABLE FUTURE As a financial institution, we recognise the impact we can create in contributing towards building a sustainable future. Our commitment lies in embracing sustainability in what we do and in doing so, we create shared value for our stakeholders. Sustainability, as a driver of risks and opportunities, is continuously being incorporated into our business practices and decision-making processes. Established our Group Sustainability Management Committee and Sustainability team 2021 Developed a Climate Change Risk Management Framework Enhancing Our Sustainability Disclosure and Communications PROGRESSING TOWARDS A SUSTAINABLE FUTURE “With sustainability issues rapidly evolving, navigating our progress on a clear Sustainability Roadmap will enable us to accelerate cohesive integration of ESG within the various aspects of our operations. Having put in place the necessary framework and strategies, our priority now lies in execution and delivery to achieve our goals and ambition that is predicated on creating meaningful long-term value for our stakeholders.” CHUAH SZE PHING Group Chief Sustainability Officer and Head of Group Marketing and Communications, Kenanga Investment Bank Berhad External Recognition Bank of the Year Award for ESG Excellence by CSR Malaysia Long-Standing Excellence in Sustainability from CSR Malaysia Malaysia Best Impact Investing Manager, Best Application of ESG by Asia Asset Management Three (3) awards from UNGCMYB for Sustainable Product Recognition, Sustainability Awareness and Employee Engagement, and Partnership for Goals Kenanga Investment Bank Berhad formally embarked on its sustainability journey with a major focus on philanthropy and community work 2016 Conducted a comprehensive group-wide materiality assessment Initiated data requirement analysis for improved disclosures Developed ESG data collection dashboard Established Sustainability Goals, Targets & 3-year Sustainability Roadmap Released our first standalone Sustainability Report and a microsite Enhanced our sustainability communications – media, website Group-wide capacity building 2022 • Gained entry to FTSE4Good Bursa Malaysia Index • Top 25% by ESG Ratings amongst public-listed companies in FTSE Bursa Malaysia EMAS Index that was assessed by FTSE Russell
16 17 Environmental Stewardship About This Report Who We Are Progressing Towards A Sustainable Future Managing Our Sustainability Risks Good Governance Sustainable Economic Growth KENANGA INVESTMENT BANK BERHAD Sustainability Report 2022 Awards and Recognitions Empowering People and Communities GRI Content Index ESG Performance Data PROGRESSING TOWARDS A SUSTAINABLE FUTURE UN SDGs SDGs Targets We Contribute Towards Relevant UNGC Principles Our Contribution to UN SDGs and UNGC Ten Principles Our Progress in FY2022 1.4 Equal rights to economic resources as well as access to basic and financial services Principle 1: Business should support and respect the protection of internationally proclaimed human rights • Extending support to our local communities through philanthropic contributions and social investments Please refer to page 84 • Contributed over RM180,000 to community investments and impacting over 4,000 lives • Continous support of social enterprise partners, Dialogues Includes All and Silent Teddies for 11 consecutive years 4.4 Increase the number of people with relevant skills for employment, decent jobs and entrepreneurship Principle 1: Business should support and respect the protection of internationally proclaimed human rights • Promoting financial literacy across the industry through our community programmes and industry financial literacy initiatives Please refer to page 87 • Conducted over 90 sessions including webinars, exhibitions, seminars, and live series with over 20,000 participants 5.5 Women’s full and effective participation and equal opportunities for leadership Principle 6: The elimination of discrimination in respect of employment and occupation • Supporting the empowerment and representation of women in our workforce Please refer to page 68 • 51% of our total workforce are women • 36% of our key and senior management are women • Overall average gender pay ratio of men to women is 1:0.92 7.2 Increase global percentage of renewable energy 7.3 Double the global rate of improvement in energy efficiency Principle 9: Encourage the development and diffusion of environmentally friendly technologies • Investing in green energy companies and converting to energyefficient equipments in efforts to reduce our energy consumption in our building and business operations Please refer to page 47 and page 60 • Working with reNIKOLA, Malaysia’s leading solar producer, through the Corporate Green Power Program to secure renewable energy • Replaced all conventional lighting at Kenanga Tower with LED lights 8.3 Encourage the growth of micro-, small- and mediumsized enterprises 8.5 Full and productive employment and decent work for all 8.10 Expand access to banking, insurance and financial services for all Principle 2: Make sure that they are not complicit in human rights abuses Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining Principle 4: The elimination of all forms of forced and compulsory labour Principle 5: The effective abolition of child labour Principle 6: The elimination of discrimination in respect of employment and occupation • Supporting social enterprises through our community investment efforts • Ensuring a safe,conducive and thriving workplace for all our employees • Expanding client base, particularly the unserved/ underserved retail segment via online platforms for investing and trading Please refer to page 87 • Raised over 2,700 meals pledge for Meals That Gives Campaign, as part of the HumanKIND Project. Amount pledged by donors were matched by Kenanga. Over RM50,000 were contributed to the cause • Collaborated with Naluri and conducted mental health talks for employees • Reported zero workplace injuries • Updated our employees maternity and paternity leave in line with the Employment Act 2022 • Launched three (3) products under Kenanga Sustainability Series • Rolled out Kenanga Digital Investing platform to provide easy access to saving and investing OUR CONTRIBUTION TO UN SDGS AND UNGC’S TEN PRINCIPLES Below are the 11 SDGs Kenanga contributes towards. Additionally, as a signatory member of the United Nations Global Compact (“UNGC”) Network, we have also aligned our sustainability efforts with the UNGC’s Ten Principles. PROGRESSING TOWARDS A SUSTAINABLE FUTURE UN SDGs SDGs Targets We Contribute Towards Relevant UNGC Principles Our Contribution to UN SDGs and UNGC Ten Principles Our Progress in FY2022 10.2 Social, economic and political inclusion of all Principle 6: The elimination of discrimination in respect of employment and occupation • Uplifting our communities through philanthropic contributions and employee volunteerism, while promoting diversity and non-discriminatory practices across our employment practices and product Please refer to page 68 and page 86 • Spread awareness on gender equality at work through collaborations with organisations such as Tulip Movements on women’s leadership • Supported Bursa Securities’ #EqualityforEquity campaign to encourage and attract more women investors • Build awareness on sexual harassment policy to all employees and trained managers aon managing sexual harrassment topic • Introduced a volunteering mechanism and recorded over 2,300 volunteering hours, with a total of 295 volunteers participated 11.6 Reduce the environmental impact of cities Principle 8: Undertake initiatives to promote greater environmental responsibility • Improving our waste management initiatives through monitoring on waste generated and collected Please refer to page 64 • Included waste monitoring metric into dashboard to record our generated, collected and managed waste by type 12.5 Significantly reduce waste generation 12.6 Encourage companies to adopt sustainable practices and sustainable reporting Principle 8: Undertake initiatives to promote greater environmental responsibility • Embracing digitalisation throughout our operations and moving towards minimising paper usage Please refer to page 49 • Nurturing a zero-waste culture amongst our employees by organising workshops and purchasing of eco-friendly products Please refer to page 66 • Digitalised 61 workflows under the iLeap project in efforts to reduce paper usage and improve workflow efficiency • Encouraged employees to start recycling habit by introducing Trashcycle Malaysia • Partnered with Zero Waste Malaysia to roll out a workshop for employees on ways to start living a zero-waste lifestyle • Recycled 19,974 kg inclusive of waste and e-waste 13.2 Integrate climate change measures into policies and planning 13.3 Improve human and institutional capacity on climate change Principle 7: Businesses should support a precautionary approach to environmental challenges • Embarking on a climate action pathway to address our climate-related risks and opportunities, while reducing our direct operational carbon footprint Please refer to page 26 • Retrofitted Heating, Ventilation and Air-Conditioning (“HVAC”) system at Kenanga Tower with a new A.I. smart chiller system to conserve energy • Integrated climate risk assessment in our lending and investment portfolios • 2,388 enrolments by employees on ESG-related training topics, including climate change
18 19 Environmental Stewardship About This Report Who We Are Progressing Towards A Sustainable Future Managing Our Sustainability Risks Good Governance Sustainable Economic Growth KENANGA INVESTMENT BANK BERHAD Sustainability Report 2022 Awards and Recognitions Empowering People and Communities GRI Content Index ESG Performance Data Sustainable Economic Growth Integrate ESG factors into our business decisions and value chain and manage ESG risks and opportunities as we innovate to build a sustainable future. Responsible Investment Incorporate ESG factors into our investment processes, offer and promote sustainable products and solutions and take an active stewardship role in the companies in which we invest. Digitalisation Leverage technological advancements to develop secure, meaningful and innovative products and solutions that will help shape the future of investing. Environmental Stewardship Promote climate positive culture within the organisation and relevant external stakeholders to attain a low carbon economy. Climate Impact Take ownership of climate risks and opportunities of our operations through monitoring environmental performance, identifying and practising behaviours to promote climate positive action and outcomes. UN SDGs SDGs Targets We Contribute Towards Relevant UNGC Principles Our Contribution to UN SDGs and UNGC Ten Principles Our Progress in FY2022 16.4 Combat organised crime, illicit financial and arms flow 16.5 Reducing all forms of corruption and bribery 16.7 Responsive, inclusive, participatory and representative decision-making at all levels Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery • Strengthening our framework and compliance culture to prevent financial crimes Please refer to page 37 • Held the annual flagship program, 6th Fraud Awareness Week (“FAW”) campaign, which saw the participation of over 2,000 from external and internal network • Hosted the 7th Annual Regulatory Seminar Assessment with over 1,000 enrolments and 10,000 total training hours logged • Updated relevant policies to minimise risk of financial crimes (such as Group Donation Policy) 17.16 Enhance partnership to mobilise technology and financial resources 17.17 Encourage and promote effective public, publicprivate and civil society partnership Principle 1: Business should support and respect the protection of internationally proclaimed human rights Principle 2: Make sure that they are not complicit in human rights abuses Principle 6: The elimination of discrimination in respect of employment and occupation Principle 7: Businesses should support a precautionary approach to environmental challenges Principle 8: Undertake initiatives to promote greater environmental responsibility Principle 9: Encourage the development and diffusion of environmentally friendly technologies Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery • Building partnerships with community-based organisations to create positive social impacts Please refer to page 84 • Initiated partnerships with entities such as: - Ant Group on developing first Wealth SuperApp - Silent Teddies and Dialogue Includes All on community outreach programmes - UNGC on advancing SDGs - Association of Certified Fraud Examiners to organise 6th FAW - Trashcycle Malaysia on door-to-door service to collect recycle wastes from employees - Zero Waste Malaysia to host an interactive session on how to lead a zero-waste lifestyle OUR ESG FRAMEWORK Our ESG Framework serves as a focal point for how we articulate our sustainability aspirations for the long-term. Anchored upon four (4) key pillars – Sustainable Economic Growth, Environmental Stewardship, Empowering People and Communities; and Good Governance, the framework guides us in our efforts to address ESG issues that are material to our business while aligning with our targets and strategies. PROGRESSING TOWARDS A SUSTAINABLE FUTURE PROGRESSING TOWARDS A SUSTAINABLE FUTURE OUR SUSTAINABILITY VISION As a leading independent investment bank, Kenanga is committed to promoting and adopting business-relevant sustainable practices by embedding ESG in our core business strategy and operations, while considering the ESG risks and opportunities in shaping up sustainable investment products and services towards contributing to the best interests of our stakeholders. Empowering People and Communities Create a positive impact on our employees, clients, business associates, as well as communities in need. Diversity, Inclusion and Wellbeing Inculcate an equitable workplace culture that recognises the unique needs and contributions of employees and where employee rights, health, safety and wellness are promoted. Community Investment Enhance financial literacy for investors and the community through education. Reaching out to communities in need through targeted social investments and employee volunteerism. Good Governance Lead a responsible business underpinned by a robust compliance culture and high levels of ethical standards. Good Business Conduct Promote and embed good business conduct and high standards of integrity throughout the organisation, operate ethically and transparently and in compliance with applicable laws and regulations.
20 21 Environmental Stewardship About This Report Who We Are Progressing Towards A Sustainable Future Managing Our Sustainability Risks Good Governance Sustainable Economic Growth KENANGA INVESTMENT BANK BERHAD Sustainability Report 2022 Awards and Recognitions Empowering People and Communities GRI Content Index ESG Performance Data AN INSIGHT INTO OUR STAKEHOLDER’S PERSPECTIVES Stakeholder engagement, assessment and feedback are integral to our organisation. We continuously work to improve our engagement approaches through various communication channels to ensure we meaningfully connect with our stakeholders to gather input relevant to current trends and changing expectations. Our Stakeholder Groups Our Commitment How We Engage Areas of Interest Those to Whom We Are Accountable • Ensure our investors and shareholders are kept abreast on how we embed ESG in our business strategy and operations • Incorporate feedback to create long-term, sustainable value for our stakeholders • Leverage innovation and technology to enhance the client experience Shareholders • Provide updates and gather feedback through meetings, reports and disclosure Clients • Provide products, tools, education and insights through our trading platforms, mass media channels, events, emails, websites and social media channels • Respond to queries, as well as gather input and feedback via social media channels, helplines and email • Cyber security and data protection • Portfolio performance • Financial inclusion • Financial literacy • Digitalisation • Responsible investing • New products and services • Market outlook • Enhanced client experience Those Who We Collaborate With • Create a safe, inclusive and high-performing work environment • Embed our values of ethics, integrity and compliance throughout the organisation, to lead a responsible business operation Regulators • Participate in industry discourse and enforce adherence to regulations and policies Employees • Engage through internal policies, meetings, emails, dialogues, training programmes, special events and performance appraisals Remisiers and Agents • Engage through policies and procedures, training programmes and special events Vendors • Collaborate through meetings, policies and procedures • Compliance culture • Cyber security and operational resilience • Training and development Those Whose Lives We Enrich • Create positive impact for communities in need through targeted social investments and employee volunteerism • Enhance the financial literacy of our communities to empower them to make decisions on their investments and financial resources Community Partners • Contribute to various social causes, in particular towards enterprises • Activate employee volunteerism and philanthropy Public • Disseminate investing knowledge via roadshows, social media channels and webinars • Community empowerment • Financial literacy WHAT IS MATERIAL TO US In 2022, we conducted materiality assessment, driven by four (4)-step process, to identify and prioritise ESG topics that are relevant to Kenanga and its stakeholders. The biennal assessment ensures that we consider and integrate these ESG topics in identifying opportunities and risks in our business operations, as well as to further guide the Group’s ESG strategy and reporting. As part of our FY2022 materiality assessment, we received 1,326 responses from 10 different stakeholder groups, including Board of Directors, employees, remisiers and agents, shareholders and investors, clients, regulatory bodies, community organisations, suppliers, media, and the public. This year a new material topic was added, ‘Employee Health, Safety and Wellbeing’, in line with the Bursa Securities’ enhanced guideline on sustainability reporting. Based on the updated results of the survey in FY2022, the materiality matrix largely remained consistent from the previous assessment. The results indicated that there was an overall higher perceived importance across all the identified 10 material topics. Through this exercise, we have identified the relative importance of specific ESG concerns and issues to Kenanga, and will serve to guide the formulation and prioritisation of our initiatives in the coming year. Identify Reviewed material topics based on benchmark assessment to ensure they remain relevant to Kenanga and its stakeholders. Prioritise Analysed and mapped survey results on a materiality matrix to illustrate the relative importance of each material topic. Survey Distributed online survey forms to key internal and external stakeholder groups to understand their perception on Kenanga’s material topics. Validate Presented the materiality matrix to the Board of Directors for review and confirmation. Significance to Kenanga’s Stakeholders Significance to Kenanga’s Business Operations LOW Good Business Conduct Talent Attraction and Management Diversity and Inclusion Employee Health, Safety and Wellbeing Client Experience Responsible Investing Climate Impact Community Investment Digitalisation HIGH MEDIUM Cyber Security Good Governance Climate Impact Empowering People and Communities Sustainable Economic Growth PROGRESSING TOWARDS A SUSTAINABLE FUTURE PROGRESSING TOWARDS A SUSTAINABLE FUTURE
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