Malaysia , Apr 16, 2025
Malaysia’s largest pension fund, the Employees Provident Fund (EPF), is under growing scrutiny from environmental groups and civil society over its significant investments in fossil fuel-linked industries. As global attention on ESG (Environmental, Social, and Governance) standards intensifies, critics argue the EPF is lagging in aligning its portfolio with climate goals.
A recent report by the Malaysian Centre for Environmental Justice revealed that EPF has more than RM 15 billion invested in companies linked to coal and oil extraction, raising concerns over long-term climate risks and potential stranded assets.
“Public money should be invested in the future, not in polluting industries,” said Ainul Farhana, a climate advocate with Greenpeace Malaysia. “The EPF must be transparent about its holdings and commit to net-zero targets like its counterparts in Europe and Australia.”
EPF officials maintain that they are taking steps toward greener investments, citing efforts to increase exposure to renewable energy projects and ESG-compliant funds. However, activists argue that the pace is too slow and lacks a clear timeline for divestment.
Pension reform advocates also warn of reputational and financial risks as global capital shifts away from fossil fuels. “This isn’t just about ethics — it’s about managing long-term returns,” said Dr. Sharifah Rania, an economist at Universiti Malaya.
The pressure comes as regional peers like Indonesia’s BPJS and Singapore’s CPF step up ESG integration. Analysts believe EPF must act decisively to remain competitive and responsible in an era of climate-conscious investing.
Calls are growing for the fund to release more granular data about its carbon footprint and outline a concrete roadmap for reducing climate-linked exposure by 2030.
