Introduction of Sustainable and Responsible Investment (SRI)-Linked Sukuk Framework
The Securities Commission Malaysia (“SC”) had on 30 June 2022 launched the Sustainable and Responsible Investment linked (“SRI-linked”) Sukuk Framework (“Framework”). Introduced as an extension of the initiatives under the Sustainable and Responsible Investment (“SRI”) Roadmap by SC to broaden SRI products offerings, this Framework is intended to facilitate fundraising by companies in addressing sustainability concerns such as climate change or social agenda. This would enable companies in these as well as other industries to transition into a low-carbon or net zero economy.
With the introduction of this Framework, private financing for sustainable development would no longer be limited to companies eligible to issue sukuk under the SRI Sukuk Framework but would also be available to a wider pool of eligible companies under the SRI-linked Sukuk Framework. Such introduction is timely for eligible companies to tap into the huge global sustainability financing market. As at 31 December 2021, the global sustainable bonds outstanding exceeded USD1 trillion with sustainability-linked bonds making up USD118.8 billion.