36 WE ARE KENANGA LEADERSHIP MESSAGE VALUE CREATION MODEL KENANGA INVESTMENT BANK BERHAD ANNUAL REPORT 2023 RESPONSIBLE INVESTING GRI 3-3 We integrate ESG factors into our investment process by selecting companies that meet our ESG standards and avoiding those with unsatisfactory performances. Industries that do not align with our core ESG values, such as controversial weapons and adult entertainment, are excluded from investment considerations. Additionally, we exercise our voting rights in investee companies with substantial holdings, following our voting policy. This formal channel allows us to communicate our views, especially on ESG-related issues, and includes significant resolutions such as the appointment of auditors and board of directors, proxy contests, anti-takeover provisions, corporate governance matters, capital structure decisions, including mergers and acquisitions, and executive compensation. Furthermore, we actively engage with stakeholders across industries and investee companies to monitor and promote good ESG practices. OUR APPROACH WHY IT MATTERS By investing in companies that are committed to sustainable practices, we can help create positive impact on the environment and society, while building long-term value and attracting investors who considers overall business sustainability in their investment decision-making process. Collaborating with asset owners, regulators and a wide range of market participants on ESG matters and ensuring that it takes place at the heart of the investment process. SUSTAINABILITY AT KENANGA Kenanga Investors Berhad and Kenanga Islamic Investors Berhad have been affirmed investment manager ratings (“IMR”) of IMR-2 by the Malaysian Rating Corporation Berhad for the seventh (7th) consecutive year since first rated in 2017 Appointed as asset manager for two (2) ESG mandates by notable Malaysian public asset owners which is a testament to Kenanga Investors Berhad’s position as trusted fund in the sustainability space Kenanga Investors Berhad completed screenings for its fixed-income stocks and sector-specific assessments for equities, with a heightened focus on sectors bearing elevated ESG risks Total assets under management (“AUM”) that underwent ESG assessment amounted to approximately RM10.0 billion, accounting for approximately 48% of our reported AUM Three (3) SRI funds launched under Kenanga Investors Sustainability Series, yields positive returns in 2023 RM73.9 million (28%) of Kenanga Private Equity Sdn Bhd’s portfolio are focused on the renewable energy sector RM44.6 million (7.4%) 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 Conducted in-depth engagement with a group of over twenty (20) companies on ESG matters, including climate change Kenanga Research organised twelve (12) ESG-related webinar series and experiential visits as part of active engagement activities for corporate and institutional clients KEY PROGRESS IN 2023
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