“We believe that ESG is the vaccine for any crises,” Tunku Alizakri Raja Muhammad Alias, chief executive of the Employees Provident Fund (EPF), said in an interview with Bloomberg TV.

“When we look back at 2020, and we look at assets that are ESG-compliant, we found that even at the height of Covid, they deteriorated at a much lower rate than the other assets.”

Demand has been buoyant for stocks based on ESG factors, helped by the strategy’s relatively strong performance during the pandemic. For instance, a FTSE index of equities with significant involvement in environmental markets rose 37% in 2020, more than double the gain in the MSCI ACWI Index of global stocks.

The EPF’s aim to be ESG-compliant comes amid a resurgence of Covid-19 infections in Malaysia, with factories belonging to glove makers, including Top Glove Corp, being one of the major sources of new cases. The EPF owns a 4.9% stake in the world’s largest maker of latex gloves, whose shares soared more than 300% last year.

The surge in infections led the Yang di-Pertuan Agong to declare a state of emergency earlier this month, shortly before a lockdown for most of the country came into effect. Most of Malaysia’s new infections have been linked to migrant workers hailing from countries like Bangladesh, Nepal, Myanmar and Indonesia.

The emergency period, which could last until Aug 1, is positive for the market, said Tunku Alizakri, who oversees about US$233 billion in assets.

“From a market perspective, it actually brought a lot of certainty or normalcy in a very volatile market,” he said. “For us, we like this stability at this point in time.”