DDCAP Group | Climate Action Pledge Report

DDCAP Group™ (DDCAP) is an industry-leading market intermediary and financial system solutions provider which connects the global Islamic marketplace responsibly via its proprietary real-time trade and post-trade services platform, ETHOS AFP™.

DDCAP aspires to provide best-in-class responsible and sustainable solutions to clients and supports awareness of the business and ethical case for responsible finance. DDCAP is headquartered in London with representative offices in the Kuala Lumpur, Dubai International Financial Centre and Manama, providing a global footprint and connecting into ESG initiatives across the GCC and Southeast Asia.

In tandem with its core offering, DDCAP seeks to invest within halal economy businesses with exceptional fintech strategies. DDCAP’s management believes that Islamic finance SMEs like itself, and those within the wider halal economy, have great potential to embed sustainable and responsible practices across the wider industry and sees such investments as a natural complement to its own ESG initiatives and industry goals.

Through DDCAP’s Sustainable and Responsible Actions (SRA) Programme, by which ESG considerations are addressed, DDCAP has made the public commitment to develop a more sustainable, equitable and prosperous world and supports the view that those in business must adopt strategies to deliver not only financial results but also social and environmental outcomes. In furtherance of this, DDCAP became a service provider signatory to the UN Principles for Responsible Investment in 2016 and a stakeholder endorser of the UN Principles for Responsible Banking in 2020.

Environmental Policy and Achievements

In 2021, DDCAP committed resource from its existing SRA governance structure to build upon its environmental achievements to date and develop a more formalized environmental policy. Whilst DDCAP’s progress in this area had already put it ahead of many of its industry peers, DDCAP recognized that focusing on an environmental strategy ahead of any government or regulatory requirements would enable DDCAP to:

• Gain further competitive advantage from its SRA initiative;
• Increase engagement with staff and raise its profile with potential new hires;
• Preserve and promote its reputation as a “first mover” in its space; and
• Prepare to engage with stakeholders and clients who are asking more questions, more frequently, about the sustainability of their value chains.

As part of this initiative, DDCAP became a signatory to the British Malaysian Chamber of Commerce (BMCC) Climate Action Pledge in 2021. As a signatory to this pledge, DDCAP committed to 6 goals over a 12-month period. DDCAP sets out below its achievements to date against these goals since 2023.

Key Achievements

Our organisation will include Climate Action as one of the key agendas in the organisation where a committee led by a member of the Board of Directors or Senior Management will report to the Board / Senior Management on its progress.

• DDCAP’s SRA Working Group is chaired by David Testa, Executive Director, DDCAP and its membership includes DDCAP’s Managing Director, Stella Cox CBE, as well as other executives and senior managers from across the company.
• DDCAP’s SRA strategy provides an opportunity to lead by example by meeting market demands whilst adhering to sustainable and responsible policies and was initially formed in light of the United Nations (“UN”) Sustainable Development Goals. DDCAP strongly identifies with the targets and objectives set for SDG 4 (Quality Education), SDG 5 (Gender Equality), SDG 9 (Industry, Innovation and Infrastructure), SDG 13 (Climate Action) and SDG 17 (Partnership for the Goals) and has been working in support of the international initiative to achieve them for some years.
• The SRA strategy paper gives further examples of the implementation of specific metrics and targets as well as DDCAP’s IT greening initiative.

As is stated in the SDGs, sustainability is not a destination but a journey, the target will always be moving forward, ahead of where we are. Accordingly, as this initiative evolves, these questions too will evolve and this document will be revised on an annual basis in line with the UN PRI Transparency Reporting Process, and with the following considerations:

1. Is there a more sustainable strategy for this situation that is in line with DDCAP’s values and goals?
2. How does this decision increase environmental risk (including reputational risk) and how can DDCAP manage and reduce these environmental risks?
3. What is the competitive advantage/market value of DDCAP’s sustainable focus with regard to this client/supplier/stakeholder relationship?
4. How can the carbon footprint of this action be reduced in order to achieve DDCAP’s carbon neutrality goals?
5. How can DDCAP communicate the sustainability focus of this initiative with their internal and external stakeholders (e.g., clients, partners, team members) to differentiate DDCAP as an employer and a service provider? Are there lessons learned which can be shared through internal teams and committees?

Stakeholder Engagement

DDCAP endeavours to engage with all stakeholders, both internal and external, about SRA matters. For example:

• Clients and Counterparties: DDCAP’s seeks to include its SRA Clause in documentation with clients and other counterparties. To date this clause has been widely accepted by clients and their legal advisors across the globe.
• Vendors and Suppliers: Vendor and Supplier due diligence procedures now incorporate SRA considerations as part of the approval and onboarding process for new vendors and suppliers. Due diligence for existing suppliers and vendors is being updated to incorporate this information and will be reviewed annually going forward. SRA Considerations will weigh heavily in the decisions about new supplier and vendor relationships as well as the continuation and renewal of existing relationships.
• Leadership and Management: SRA matters are now a recurrent agenda item on all executive and risk committees as well as all internal working groups to encourage active engagement with the SRA initiative and the integration of SRA considerations in the operations and commercial considerations of the company.
• In 2019, Professor Dr. Mohamad Akram Laldin generously agreed to assume the role as the SRA Champion on DDCAP’s SSB, integrating DDCAP’s SRA initiative within the SSB and continues to serve in this role.
• Greater emphasis on our own conscientious commodity inventory: Attention to inventory origination and related market developments on sustainable alternatives, robust procedures in place to assess risks of potential new commodities. Any new commodity is analysed and a paper is presented to the Market Risk Management Committee (MRMC) as well as the Commodity Focus and SRA Working Groups, whilst commodity updates from the Commodity Focus Group and inventory management team are regularly presented to key committees, including MRMC and EXCOM.