Kuala Lumpur, 4 Oct 2018 – INCEIF today signed a Memorandum of Understanding (MoU) with WWF-Malaysia to jointly develop and promote sustainable financing, with the shared goal of formulating environmental and social sustainability policies, standards and strategies relevant to Malaysia.
INCEIF was represented by President & CEO Prof Dato’ Dr Azmi Omar and WWF-Malaysia by Mr Thiaga Nadeson, Head of Markets and Education, at a signing ceremony held at INCEIF Campus.
10 years after the global financial crisis, the Paris Agreement and the United Nation Sustainable Development Goals (UNSDGs) are driving convergence in multiple aspects of responsible finance, including sustainable, responsible and impact investing (SRI); environmental, social and governance (ESG); and Islamic finance. With environmental and societal concerns coming to the forefront of global discussion, adopting Islamic finance and green finance is a matter of highest urgency, making the INCEIF and WWF-Malaysia partnership apt and timely. It is hoped that with WWF-Malaysia’s unique positioning on sustainable finance, informed by its know-how in science, conservation and environment, combined with INCEIF’s expertise in Islamic Social Finance instruments, the collaboration will develop financial mechanisms which protect and encourage critical ecosystems thay form the basis for a sustainable economy and prosperous society.
Prof Dato’ Dr Azmi Omar said: “At INCEIF, we have come to realise that our winning strategy towards promoting the development of Islamic finance is by establishing effective collaborative partnerships. INCEIF is proud to add WWF-Malaysia as one of our partners in the joint effort to build a better society. The collaboration aims to promote the better way financing and investments are made, bringing them in line with international commitments like the UN 2030 Sustainable Development Agenda and its 17 Goals.”
The objectives of this collaboration are to strategically develop and promote sustainable financing and to exchange relevant experience, technical advice and analysis on environmental and social sustainability aspirations, policies, standards, strategies and risks relevant to Malaysia. The collaboration with WWF-Malaysia is vital in ensuring the robustness of the Value-based Intermediation Assessment Framework (VBIAF). WWF-Malaysia have the expertise in science, conservation, environment and finance, which enables the taskforce to help financial institutions reduce their impact on the natural world and develop financial mechanisms which protect and restore critical ecosystems that form the basis for a sustainable economy and prosperous society.
INCEIF is part of the VBIAF taskforce that was formed during VBI Community of Practitioners meeting on 30 March this year to spearhead the strategic development of VBIAF. The taskforce is chaired by INCEIF and co-chaired by the Islamic Banking and Takaful Department of Bank Negara Malaysia (BNM).
At present, especially in Malaysia, the mainstream financial sector does not sufficiently manage ESG risks or incentivise sustainability improvements in key commodity industries, such as the palm oil sector. The finance sector ends up fuelling resource conversion that does not take into account limits on our natural resources and the livelihoods that depend on these resources.
“Islamic finance must take the lead in promoting green finance where responsible and impact financing are being embraced in pursuit of values beyond financial motivation. We are happy to embark on this journey with a mainstream player with a global name such as WWF-Malaysia,” Dato’ Azmi said.
According to WWF-Malaysia, the finance sector has a key role to play in achieving the goals of the Paris Agreement and the UN SDGs, as it has the ability to influence business strategies and supply chains, to reduce their threats to the environment and provide financial mechanisms that protect and encourage sustainable ecosystems.
“WWF-Malaysia is proud to be part of this collaboration with INCEIF, as it will support the further strengthening of sustainable finance in Malaysia. The exchange of relevant experience and technical advice between WWF-Malaysia and INCEIF, will further our aspirations for Malaysia to be the leader in sustainable finance in Southeast Asia,” said Mr. Thiaga, Head of Markets and Education from WWF-Malaysia.
INCEIF specialist researchers have already made an indelible mark on advancing Islamic Social Finance instruments for the benefit of humanity at large. To date, INCEIF has been awarded a research grant by the Ministry of Energy, Green Technology and Water (now known as Ministry of Energy, Science, Technology, Environment and Climate Change) to conduct a comprehensive feasibility study on innovative financing, investment platform and business models for renewable energy and energy efficiency in Malaysia.
INCEIF is also embarking on a research consultancy for the Malaysian Technology Development Corporation (MTDC), a wholly owned institution by Khazanah Nasional Berhad, to examine the transformation of technology-based small-medium enterprises (“SMEs”) from laboratory idea to commercialization. The findings from the study can be used for policy development by MTDC towards establishing sustainable technopreneurs at the SME level.