With ESG gaining much attention internationally and locally, are Malaysian organisations waking up to these new realities of compliance and governance? In addressing one sector which is financials, the banks have been long advocates of society-based values in their dealings and business, but this now needs to be adopted with new policies and clearer guidelines in order for more universal implementation.
In discussing Malaysian Banks and if they are complying with ESG guidelines, Bank Negara Governor, Tan Sri Nor Shamsiah said Malaysian banks were taking efforts to integrate environmental, social, and governance (ESG) considerations in their governance, business strategy, operations, and risk management.
“This is being reinforced by regulatory measures such as the Climate Change and Principle-based Taxonomy and upcoming guidance on risk management and scenario analysis that has been issued for consultation,” she said, in response to a question on flood events in Malaysia that further solidified the need for ESG adaptation.
She explained that the recent floods were a powerful demonstration and reminder of the need to take the sustainability agenda seriously.
“Some banks have started analysing exposures in their lending and investment portfolios, and then engaging customers where there are ESG concerns. We are also seeing more and more banks supporting their customers transition to more sustainable practices, including by offering solutions and advice.”
Nor Shamsiah said these were just baby steps, and there was still a lot more work to be done.
“But in this area, we are confident that the banking industry is moving in the right direction and that momentum will continue to pick up,” she added.
