KUALA LUMPUR (April 21): Permodalan Nasional Bhd (PNB) will be better positioned to seize new opportunities and manage its risks by integrating the Environment, Social and Governance (ESG) framework systematically into its investment operations, according to its Chief Investment Officer Rizal Rickman Ramli.
Speaking in the media briefing on Thursday (April 21), Rizal said PNB intends to elevate ESG practices within its portfolio companies and highlighted that new investments will need to go through a fairly rigorous ESG screening process to understand the risks and opportunities that it brings.
“At the same time, as part of our ongoing monitoring of existing investments, we do need to have more detailed assessments of how the investments will perform in light of the various ESG metrics.
“We also do need to focus on internal talent building, in order for us to really understand the ESG risks and opportunities that we have in front of us, so that is essentially the integration process,” he revealed during the launch of PNB’s Sustainability Framework.
As 60% of its investments are into domestic public equities, Rizal highlighted that some of its investment companies may face challenges in adopting ESG framework, especially in sectors where a lot of emissions are happening.
He added that PNB will support its portfolio companies to tackle the issue by conducting engagements with various stakeholders in order to support improvements in the particular sector.
Notably, PNB holds stake in various publicly listed companies such as Sapura Energy Bhd, Velesto Energy Bhd, S P Setia Bhd, Sime Darby Bhd, Sime Darby Plantation Bhd, Sime Darby Property Bhd and UMW Holdings Bhd.
It also has substantial stakes in utility firm Tenaga Nasional Bhd and IJM Corp Bhd, which is involved in quarrying and infrastructure concessions.
Earlier, PNB announced that it will invest a total of RM10 billion in Green and Transition assets by 2030, as part of its commitment to achieve a Net Zero Enterprise and Net Zero Portfolio by 2025 and 2050 respectively.
The PNB’s Sustainability Framework, which was unveiled on Thursday, outlines 10 commitments for PNB’s own operations, as well as for its investments under the three pillars of ESG.