Sustainability Strategy

Khazanah’s sustainability strategy is anchored on the Securing the Future framework, which defines the outcomes we seek to deliver as part of our long-term mandate.

The framework is informed by a double materiality approach, which considers both how sustainability factors affect Khazanah’s portfolio and how our investments impact the broader economy, society and environment. This provides a clearer view of the issues that matter most and where we can contribute meaningfully.

Our Guiding Principles

1

Meet legal and ethical standards as responsible corporate citizens

2

Be accountable to stakeholders and consider what they look to us for

3

Ensure returns commensurate with risks so that we can manage expected outcomes

4

Act fairly and judiciously to uphold what is right and ensure equity

5

Be practical and reasonable to take into account context and potential trade-offs

6

Prioritise substance over form to prevent green-washing

7

Create value for our investments by crowding in solutions

Our Roles

We recognise that Khazanah plays multiple roles, and our approach to sustainability differs based on what is appropriate within the different contexts we operate in.

Responsible Investor

Safeguarding portfolio resilience by balancing risk, return, and opportunity

National Advocate

Advocating and influencing from the perspective of a sovereign wealth fund and asset owner

Committed Enterprise

Developing talent and shaping culture to guide employees
We have established partnerships and execution arms to carry out their specific scopes where they differ from Khazanah’s main mandate and strategy, and we continue to work together to drive alignment and increase coverage of issues where most appropriate.

Securing the Future

The responsibility of generating wealth today while ensuring a secure future for tomorrow

Our Vision for a Sustainable Malaysia

Our strategy is focused on three priority outcomes for Malaysia:

Stable and Strong Economy

Supporting a resilient economy that facilitates the flow of capital, knowledge and opportunities

Liveability for All

Contributing to a safe, inclusive environment that enhances quality of life

Thriving Communities

Enabling individuals and communities through access to opportunities, talent development, workers rights and inclusive solutions

These priorities guide how we allocate capital, engage with portfolio companies and work with partners across sectors. Rather than operating as a standalone initiative, sustainability is embedded into investment decisions, organisational practices and portfolio-wide engagement.

Protecting Long-Term Value

Integrating responsible investment principles

Upholding good governance

Encouraging beta activism

Catalysing innovation

Progressing Liveability

Promoting access through increased connectivity

Fostering good physical environment

Ensuring asset resilience

Improving quality of life

Catalysing Communities

Developing talent pipeline

Safeguarding workers wellbeing

Enhancing community development

Khazanah’s Climate Change Management Approach to address each pillar

Key Enablers

Our Material Matters

Material matters are the key sustainability issues identified as most important to Khazanah and our stakeholders, and they serve as a foundation for shaping Khazanah’s sustainability approach.

Our materiality assessment guides our sustainability strategy by highlighting the issues most relevant to Khazanah and our stakeholders.

It underscores the importance of economic, governance, and social matters to Khazanah in what impacts us as well as where we can drive significant impact.

S3

Ethics, Integrity and Responsible Policies and Practices

S4

Employee Diversity, Equity and Inclusion

EC4

Industry Stewardship and Partnership

E1

Climate Change

S5

Social Impact of Products and Services

G6
Responsible Political Engagement
S2
Employee Learning and Development
S1

Employee Management and Wellbeing

G5
Risk Management and Compliance
EC3
Risk Management and Compliance
G4

Anti Bribery, Anti Corruption and Anti Money Laundering

G2

Accountability and Transparency

G3
Ethics, Integrity and Responsible Policies and Practices
EC2
Supporting National Economic Goals
G1

Board and Management Effectiveness

EC1

Financial Performance, Stability and Growth

Material Matters

*The above matrix shows the top 16 issues, note that this is a snapshot of the full matrix

Khazanah’s Climate Change Management Approach

Climate Resilient Portfolio

Preserve the portfolio to ensure resiliency to physical and transition risks

Protect and steward the portfolio

Manage climate-related risks through responsible investing integration and identifying opportunities in climate adaptation and decarbonisation

Communities Safeguarded from Climate-Related Risks

Protect businesses and communities from impact of climate change whether it’s through adaptation or mitigation

Empower communities and businesses

Raise awareness and support communities and businesses in proactively mitigating climate-related risks and mobilizing support if required

Advocate for Climate Action

Champion climate advocacy to align global and national movements with KNB’s strategic goals

Fostering strategic partnerships

Support climate action through evidence-based advocacy; utilising scientific research and data to shape policies, strategies and stakeholder engagement

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