KENANGA INVESTMENT BANK BERHAD INTEGRATED ANNUAL REPORT 2024 WE ARE KENANGA OUR SUSTAINABILITY APPROACH LEADERSHIP STATEMENT HOW WE ARE GOVERNED FINANCIAL STATEMENTS SHAREHOLDERS’ INFORMATION ADDITIONAL INFORMATION OUR VALUE CREATION APPROACH 47 46 MATERIAL MATTERS Responsible Investing Cyber Security Client Experience GOALS Goal 1 Increase support of sustainable economic activities Goal 2 Champion cloud-first strategy to increase scalability and flexibility Goal 3 Increase automation for productivity Goal 4 Increase digital distribution and resilience of products and services Digitalisation SUSTAINABLE ECONOMIC GROWTH UN SDGs Our approach to integrating ESG considerations into our core operations, investing, and decision-making processes is a crucial component of our strategy to deliver innovative sustainable finance and investing products for our clients. We employ a multi-faceted approach to responsible investment, engaging in both product development and active management of the businesses in which we invest in. SUSTAINABLE ECONOMIC GROWTH RESPONSIBLE INVESTING WHY IT MATTERS Investing in companies that are committed to sustainability enables us to create positive environmental and social impacts while building long-term value. It also enhances our ability to attract investors who prioritise business sustainability in their investment decisions. Incorporating ESG factors into investment decision-making to generate sustainable, long-term financial returns while promoting positive societal impact. Key Risks: Greenwashing risk stems from exaggerated or misleading sustainability claims, while market and performance risks result from evolving ESG trends and regulations, leading to short-term investment fluctuations. Transition and reputational risks are linked to financing high-emission sectors, which can trigger divestment pressure and impact revenue negatively. Key Opportunities: Responsible investing drives long-term value by enhancing resilience and growth. It improves risk management, mitigates ESG-related risks, and strengthens investor confidence, while attracting sustainable capital. Key Activities: • Kenanga Investors Berhad (“KIB”) and Kenanga Islamic Investors Berhad were affirmed investment manager ratings (“IMR”) of IMR-2 by the Malaysian Rating Corporation Berhad for the 8th consecutive year since they were first rated in 2017. • In 2024, KIG further strengthened its ESG Framework by integrating Climate Scenario Analysis to assess the resilience of its investment portfolios against potential adverse climate conditions, including physical and transition risks. • As of December 2024, KIB’s ESG-screened assets under management (“AUM”) amounted to approximately RM12 billion, which is 51% of its reported AUM. • Eq8 Capital Sdn Bhd, is a member of KIG, launched the world’s first Waqf-featured exchange-traded fund (“ETF”), aimed at fostering long-term, sustainable benefits in sectors like education, healthcare, economic empowerment, and environmental preservation. • Approximately RM73.9 million (28%) of Kenanga Private Equity Sdn Bhd’s portfolio is focused on the renewable energy sector, while RM94.5 million (13.3%) of the loan and financing portfolio under Kenanga’s Corporate Banking division in green lending and financing are related to green technology, and climate change mitigation activities. • KIG conducted in-depth engagements with over 30 companies, focusing on key ESG issues, including climate change. • Kenanga Research carried out a total of nine (9) ESG-related webinars series and experiential visits as part of active engagement activities for corporate and institutional clients.
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