Saudi Environment Fund Adopts Global Investment Standards

Riyadh, July 11, 2024 — The Environment Fund (EF) has announced its voluntary compliance with the Global Investment Performance Standards (GIPS®) from the CFA Institute, making it among the first asset owners in Saudi Arabia and the region to adopt these rigorous global benchmarks for investment performance reporting. The announcement, released via the Saudi Press Agency, underscores the Fund’s commitment to transparency, governance, and international best practices in asset management, aligning with the Kingdom’s Vision 2030 objectives.

Context and Background

The Environment Fund was established to support the financial sustainability of Saudi Arabia’s environment and meteorology sectors, providing resources for their development through strategic capital investment. By adopting GIPS®, the Fund signals its dedication to full disclosure and fair representation of investment performance—principles that have been championed globally by the CFA Institute since 1999. With over 1,700 firms and asset owners in 48 markets already compliant, GIPS® is recognized as the gold standard for investment performance reporting.

This move places the Environment Fund at the forefront of a growing trend in the region, where institutional investors are increasingly embracing international standards to enhance credibility and attract global partnerships. It also reflects the Fund’s proactive approach to aligning with the highest levels of governance and risk management.

Key Details

Muneer Al-Sahli, Acting Chief Executive Officer of the Environment Fund, stated: “The Environment Fund’s compliance with the Global Investment Performance Standards reflects the fund’s commitment to apply best practices in Asset Management and provide investment performance reports to the Board of Directors and stakeholders in accordance with best practices globally which are based on the principles of transparency and full disclosure.”

Taghreed Alhurasen, EF’s Chief Investment and Treasury Officer, added: “The Environment Fund is committed to continuously achieving the highest levels of efficiency in managing its investments. Complying with these standards is an indicator of the quality of governance procedures, performance measurement systems, and risks associated with investment portfolios.”

Fahad Kordi, President of CFA Society Saudi Arabia, commended the Fund: “We applaud the Environment Fund for making the voluntary decision to comply with the GIPS® Standards and being among the first Asset Owners in Saudi Arabia and the region to claim compliance with the Standards, which contributes to the development of the investment industry in Saudi Arabia.”

Implications and Impact

The Environment Fund’s compliance with GIPS® is expected to bolster investor confidence and facilitate greater transparency in Saudi Arabia’s financial markets. By adhering to globally recognized standards, the Fund enhances its ability to attract international investment and collaborate with global institutions. This development also supports the broader evolution of the Saudi investment landscape, encouraging other asset owners to follow suit and adopt similar best practices.

Furthermore, the move reinforces the Kingdom’s reputation as a hub for responsible investment and sustainable finance. It demonstrates that Saudi institutions are not only participating in global markets but are also helping to shape them through adherence to high ethical and professional standards.

Vision 2030 Alignment

The Environment Fund’s adoption of GIPS® directly supports Vision 2030’s goals of economic diversification, transparency, and sustainable development. By ensuring financial sustainability for environmental and meteorological sectors, the Fund contributes to the Kingdom’s long-term prosperity and environmental stewardship. This step also exemplifies the Vision’s emphasis on good governance and international cooperation, positioning Saudi Arabia as a leader in responsible investment practices.

20 Questions

Q1. What is the Environment Fund?

A1. The Environment Fund is a Saudi governmental entity established to achieve Vision 2030 goals by ensuring financial sustainability for the environment and meteorology sectors, supporting environmental programs, and promoting eco-friendly technologies.

Q2. What are the Global Investment Performance Standards (GIPS®)?

A2. GIPS® are voluntary global standards administered by the CFA Institute that ensure full disclosure and fair representation of investment performance, used by over 1,700 firms in 48 markets worldwide.

Q3. Why did the Environment Fund adopt GIPS®?

A3. The Fund adopted GIPS® to demonstrate its commitment to transparency, best practices in asset management, and accurate performance reporting to stakeholders, aligning with global standards.

Q4. Who announced the compliance?

A4. The compliance was announced by the Environment Fund via the Saudi Press Agency on July 11, 2024.

Q5. What did Muneer Al-Sahli say about the compliance?

A5. Muneer Al-Sahli, Acting CEO, stated that compliance reflects the Fund’s commitment to best practices in asset management and transparent reporting based on full disclosure principles.

Q6. Who is Taghreed Alhurasen?

A6. Taghreed Alhurasen is the Chief Investment and Treasury Officer of the Environment Fund, who emphasized the Fund’s dedication to efficiency and governance in investment management.

Q7. What did Fahad Kordi say?

A7. Fahad Kordi, President of CFA Society Saudi Arabia, applauded the Fund’s voluntary decision, noting it contributes to the development of Saudi Arabia’s investment industry.

Q8. How many firms have adopted GIPS® globally?

A8. Over 1,700 firms and asset owners in 48 markets worldwide have adopted the GIPS® standards.

Q9. When were GIPS® introduced?

A9. GIPS® were introduced in 1999 by the CFA Institute to standardize investment performance reporting globally.

Q10. What is the significance of this compliance for Saudi Arabia?

A10. It positions Saudi Arabia as a regional leader in investment transparency and governance, enhancing the credibility of its financial institutions and attracting international investment.

Q11. Is the compliance mandatory?

A11. No, GIPS® compliance is voluntary, but it is considered a best practice that demonstrates a commitment to high ethical and professional standards.

Q12. How does this align with Vision 2030?

A12. It supports Vision 2030’s goals of economic diversification, transparency, and sustainable development by promoting good governance and international cooperation in investment practices.

Q13. What are the benefits of GIPS® compliance?

A13. Benefits include increased investor confidence, improved transparency, better risk management, and enhanced ability to attract global partnerships and investment.

Q14. Who administers GIPS®?

A14. The CFA Institute administers GIPS® globally, ensuring consistent application and promoting ethical standards in investment performance reporting.

Q15. What does the Environment Fund invest in?

A15. The Fund invests in initiatives and programs that support environmental sustainability, meteorology, and the development of eco-friendly technologies in Saudi Arabia.

Q16. How will this affect stakeholders?

A16. Stakeholders will benefit from more accurate and transparent performance reports, which build trust and facilitate informed decision-making regarding the Fund’s activities.

Q17. Are other Saudi entities GIPS® compliant?

A17. The Environment Fund is among the first asset owners in Saudi Arabia and the region to claim compliance, setting a benchmark for others to follow.

Q18. What is CFA Society Saudi Arabia?

A18. CFA Society Saudi Arabia is a local chapter of the CFA Institute that promotes professional excellence and ethical standards in the investment industry within the Kingdom.

Q19. What impact does this have on the region?

A19. It encourages other regional asset owners to adopt GIPS®, elevating the overall standards of investment management and transparency in the Middle East.

Q20. What are the next steps for the Environment Fund?

A20. The Fund will continue to uphold GIPS® standards, further integrate best practices, and support Vision 2030 through sustainable investment and environmental stewardship.

---