Nomura kicks off Shariah sustainability fund in Malaysia

SHAH ALAM – The demand for sustainable investments is high, and Nomura's assets under management (AUM) in this area are expected to rise.

Sustainable or environmental social and governance (ESG) funds, also known as sustainable funds, make up roughly 10 per cent of Nomura Asset Management's total assets under management (AUM) in international equities, the company reported.

Nomura Asset Management Malaysia Sdn Bhd hosted its first Global Shariah Sustainable Equity Fund on June 29 in Kuala Lumpur as part of initiatives to develop Malaysia's value proposition as a centre for Sustainable and Responsible Investment (SRI) and green financing by virtue of its leadership position in Islamic finance.

ZICO Advisory Services Director Dr Aida Othman, during the forum, said that due to its natural alignment with the principles of sustainable and responsible investment, Malaysia, a global leader in Islamic finance, was leading the charge in promoting Shariah-based investing to ethical investors everywhere (SRI).

“Through the issue of green sukuk, Malaysia has also promoted Islamic finance as a creative financing instrument.

“The variety of investment activities known as "ESG investments" recognise the relationship between businesses and the societies and surroundings in which they operate as well as the interaction between businesses and the shareholders who own them,” explained Aida in a statement.

Although shariah and sustainable investing strategies have emerged separately, they both have religious foundations and aim to slant financial decisions in favour of more sustainable outcomes.