Kenanga-Sustainability-Report-2022

46 47 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 Kenanga Sustainability Series: World Quality ESG Fund About the Fund The Fund seeks to provide capital growth by investing in the NT World Quality ESG Fund managed by Northern Trust Asset Management. Launched Date 6 September 2022 Sustainable and Responsible Investment Strategy The Fund Investment Manager will apply its proprietary scoring to the securities eligible for investment after excluding those securities that do not meet certain ESG criteria to assess their quality based on profitability, management efficiency and cash generation, thereby maximising exposure to securities which exhibit quality and have favourable ESG characteristics. Kenanga Sustainability Series: Emergency Waqf Musa’adah Fund About the Fund As a qualified SRI fund product, the Kenanga Sustainability Series: Emergency Waqf Musa’adah Fund sets out to generate sustainable returns that will directly benefit climate change-related disaster victims in the country by helping them return to normalcy. The Fund aims to primarily provide income distribution and achieve capital growth by investing in local and global diversified portfolios of Shariah-compliant equities, Shariah-compliant equity-related securities, sukuk, Islamic money market instruments, or Islamic deposits that integrates both Shariah principles and principles of sustainable investing. Launched Date 6 October 2022 Investment Strategy The External Fund Manager adopts the following ESG methodology throughout its investment and decision-making process: • ESG Integration: ESG integration involves evaluation of ESG criteria on companies in which the Fund invests. The External Fund Manager incorporates relevant ESG factors as part of the securities analysis, stock selection and post-investment portfolio monitoring. • Positive Screening: Positive screening involves assessment and scoring of companies based on the relevant ESG factors to ensure that the Fund invests only in companies with good ESG quality and ESG scores. • Negative Screening: Negative screening aims to exclude investing in sectors or companies with principal activities that are deemed to be not aligned with international norms or the External Fund Manager’s ESG core values. If the companies in which the Fund invests show persistent decline in their ESG factors and/or ESG scores, the External Fund Manager will seek to dispose of the Fund’s investments in such companies within an appropriate timeframe. Focus on Green Economy We continue to explore avenues to support a green economy through the mobilisation of capital and financial flows. Kenanga Private Equity Sdn Bhd (“KPE”), our private equity arm, actively strives to explore climate-friendly ventures, as well as companies with a strong ESG agenda. KPE has also incorporated the Climate Change RAC as part of its investment assessment strategy. Pledge to Preserve (“P2P”) Campaign The P2P Campaign was an initiative and collaboration with the Animals Projects & Environment Education Sdn Bhd (“APE Malaysia”). APE Malaysia is a social enterprise focusing on improving animal welfare through the development of volunteering projects and educational programs. The ROAR initiative, a reforestation initiative championed by APE Malaysia, aims to recreate degraded habitats for endangered animals at its reforestation sites at Lower Kinabatangan River in Sabah. The campaign ran from 30 March 2022 to 30 December 2022. For each fresh investment contributed to the KSS products in 2022, the investor would have one (1) tree sapling planted on their behalf by APE Malaysia. Kenanga Investors also matched the total number of trees planted from the campaign at the end of campaign period, as well as sponsored saplings on behalf of each Kenanga Investors staff. Total Tree Saplings Planted 785 As of 31 December 2022, 5.3% of loan and financing portfolio under Kenanga’s Corporate Banking division in green lending and financing are related to renewable energy, green technology, and climate change mitigation activities. SUSTAINABLE ECONOMIC GROWTH SUSTAINABLE ECONOMIC GROWTH To learn more about our Climate Change RAC, please refer to page 27 to 31 of this Sustainability Report. For more funds under the Kenanga Sustainability Series, please refer to: https://www.kenangainvestors.com.my/. As at 31 December 2022, approximately 28% of KPE’s portfolio are focused on the renewable energy sector. “When it comes to ESG investing, an investor should look for companies with responsible behaviour, sustainable policies, and good governance that are able to consistently generate positive impact on the environment and society.” ONG SOON CHONG Head of ESG & ETF Investment, Kenanga Investors Berhad Corporate Banking at Kenanga has started to incorporates ESG factors into its lending and financing activities. In 2023, new corporate loans will be subjected to ESG screening as guided by the CCRM Framework.

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