44 45 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 WHY IT MATTERS By investing in companies that are committed to sustainable practices, we can help create positive impact on the environment and society, while building long-term value and attracting investors who considers overall business sustainability in their investment decision-making process. OUR APPROACH Our Investment Strategy Kenanga Investors Group (“Kenanga Investors”) or (“KIG”) is the asset and wealth management arm of the Group. As part of our commitment to responsible investing, Kenanga Investors works closely with asset owners, regulators and a broad range of market players to integrate ESG considerations into our investment process. Kenanga Investors has been a signatory to the Malaysian Code for Institutional Investors (“Code”) since 2017, and we have established procedures to support the Code’s principles throughout our investment value chain. Additionally, our membership in the Institutional Investors Council (“IIC”) and active participation in JC3 reflect our dedication to advancing the ESG agenda while accelerating a swift response to the climate risks in our sector. Kenanga Investors and Kenanga Islamic Investors Berhad (“KIIB”) have been affirmed investment manager ratings (“IMR”) of IMR-2 by the Malaysian Rating Corporation Berhad for the 6th consecutive year since first rated in 2017. This award is in recognition of KIG’s effort in promoting sustainability and transparency in their management processes and operations. In 2022, KIG expanded its Sustainability Blueprint to include the fixed-income asset class by establishing an in-house ESG assessment to perform positive screening for bonds and sukuk-based on independent and accredited external data sources. On the equity front, a more comprehensive sector/industry-focused assessment was established for sectors with high ESG risk. To effectively manage and monitor risks, various factors and indicators specific to respective industries such as palm oil, oil & gas, banking & finance, power, and mining were integrated into this process for a more holistic perspective. Following this, KIG has developed strategies tailored to include ESG screening procedures, participation in active stewardship via engagement with stakeholders, and the exercise of voting rights in investee companies. RESPONSIBLE INVESTING [GRI 3-3] ESG Integration Strategy Negative Screening • Avoid investing in companies with poor ESG performances • Exclude industries that do not align with our ESG core values from investment consideration, such as controversial weapons and adult entertainment Voting Rights • Exercise our voting rights in investee companies with substantial holdings, as per our voting policy • Serve as a formal channel to communicate and relate our views to investee companies, especially on ESGrelated issues Active Engagement • Engage actively with stakeholders across industry and investee companies to monitor and promote good ESG practises Positive Screening • Incorporate ESG factor assessment into investment analysis and decision-making • Invest in companies that meet our ESG standards SUSTAINABLE ECONOMIC GROWTH ESG Integration Throughout Investment Life Cycle Post-Investment • Continuous ESG monitoring and review • Exercise active ownership through voting and engagement to ensure continued ESG alignment Pre-Investment • Stock selection based on ESG assessment conducted via positive and negative screening Divestment • Divest stocks that are not aligned with our ESG values Our Sustainable Investment Products We are dedicated to expanding our investment product offerings as we continue to progress along the path of responsible investing by providing our clients with a wider range of ESG-linked investment options. In 2022, Kenanga Investors launched three SRI-qualified ESG funds under its Kenanga Sustainability Series. These products received multiple accolades for its ESG focus, which includes ‘Sustainable Product Recognition’ by UNGCMYB, as well as ‘Best Application of ESG (ASEAN)’ and ‘Malaysia Best Impact Investing Manager’ by Asia Asset Management. In addition, these funds were disclosed in the research reports which we have published on our website under the ‘Market Insights’ webpage. These reports also provide a comprehensive look at the ESG criteria for investment. Futhermore, in 2022, KIG was appointed by several public asset owners in Malaysia to manage their first-ever sustainability funds. We are proud to play our part in supporting the national sustainability journey through responsible investments. Kenanga Sustainability Series: High Yield Bond Fund About the Fund The Fund is Malaysia’s first Sustainable and Responsible Investment (“SRI”)-qualified high yield bond fund, which seeks to provide income and capital growth by investing in the NT Global High Yield ESG Bond Index Fund managed by Northern Trust Asset Management. Launched Date 30 March 2022 Sustainable and Responsible Investment Strategy The Fund will exclude securities that do not meet certain ESG criteria, such as weapons producers, tobacco producers, thermal coal producers and companies that are in breach of the UNGC’s Ten Principles. The Fund will employ an optimisation methodology proprietary to the Fund Investment Manager to overweight securities issued by companies that are leaders in implementing ESG principles, thereby maximising exposure to securities with higher ESG ratings while aligning key risks relative to the ICE BofAML Global High Yield Index, including duration, yield, option adjusted spread, and credit quality. “The Kenanga Sustainability Series: World Quality ESG Fund is one of the highlights of our 2022 roll-outs, and is something we have been working closely on with Northern Trust Asset Management for a substantial part of the year. We are excited to expand our range of solutions to investors so that we can assist them in diversifying their investment risks and returns, thus allowing them to navigate various market conditions, while investing responsibly.” DATUK WIRA ISMITZ MATTHEW DE ALWIS Executive Director and Chief Executive Officer, Kenanga Investors Berhad
RkJQdWJsaXNoZXIy MTc1ODMy