Greater awareness and efforts by financial institutions to strengthen their response to climate risk, has led to an increased demand for practical tools and urgency to address key gaps needed to support the transition, said financial regulators on Thursday (Sept 1).
In a joint statement, Bank Negara Malaysia (BNM) and the Securities Commission (SC) said the Joint Committee on Climate Change (JC3) continues to engage with the relevant ministries, government agencies and corporates to identify climate and sustainable financing needs that can be mobilised through the financial sector.
“We are encouraged by the increasing focus and concrete actions being taken by financial institutions to manage climate-related risks. Further progress will however critically depend on key enablers, including accessibility to data and better disclosures being in place,” Bernama quoted BNM deputy governor and co-chair of JC3 Jessica Chew as saying.
She added that the JC3 remained committed to addressing these challenges, alongside increased efforts to scale up transition finance.
Meanwhile, SC deputy chief executive and JC3 co-chair Datuk Zainal Izlan Zainal Abidin said it is important for the JC3 to have close engagement and collaboration with relevant stakeholders in progressing climate action in Malaysia.
“Towards this end, the JC3 has conducted a series of engagements, including a meeting with four key ministries in July to forge closer collaboration with the government,” he added.
Zainal Izlan said such engagements have brought greater clarity on the national plans and initiatives that both the financial sector and government could pursue and collaborate on, to align their climate actions in developing an ecosystem that is conducive for sustainable finance to flourish.
The JC3 held its eighth meeting on Aug 29, 2022 and would continue to focus on several priorities including the issuance of the Task Force on Climate-Related Financial Disclosures (TCFD) Application Guide for Malaysian Financial Institutions.
The regulators said JC3 is now supporting Capital Markets Malaysia (CMM), an affiliate of the SC, to develop an ESG Disclosure Guide tailored to Malaysian small and medium enterprises (SMEs) to improve the quality of and access to information on business resilience to ESG-related risks.
JC3 also welcomed the issuance of the Sustainable and Responsible Investment-linked (SRI-linked) Sukuk Framework by the SC on June 30, 2022, to facilitate companies to issue SRI-linked sukuk to support their transition towards low-carbon activities.
To further scale up sustainable financial offerings by financial institutions, JC3 is actively exploring suitable pilot programmes to test new green solutions and instruments such as blended finance to support the development of climate-friendly projects.
