Markets
Ramping up sustainability awareness
Cheah Chor Sooi | 14 Apr 2017 00:30
SUSTAINABILITY is no longer hype or a buzzword but an essential criterion to ensure healthy return on investment in the context of listed companies.

Palm oil producer IOI Group lost many of its largest clients when it failed to retain its sustainability certificates (for failure to adequately protect peat areas and forests) in March last year, a development which prompted Moody’s Investors Service to review its credit rating for a possible downgrade.

Although the Roundtable on Sustainable Palm Oil (RSPO) reinstated IOI’s certification five months later after it was found to have fulfilled the body’s demands to improve its environmental performance, the earlier ruling had led to a wave of major multinationals, including Unilever, Kellogg’s and Mars dropping IOI from their lists of approved suppliers.

On this note, RAM Consultancy Services Sdn Bhd observes that some of Malaysia’s largest institutional investors have committed to investing responsibly either into instruments issued by sustainable companies or those that create positive impact.