Financial regulators worldwide have raised the bar on ESG reporting requirements to compel financial institutions to incorporate ESG principles, disclosures and risk mitigation measures in their business strategies, decisions and risk frameworks to support national ESG efforts.
While banks have a vital role to play in promoting sustainability, they also have a catalytic role to move the needle on decarbonisation and commit to transformative lending and practices to reduce the impact of climate change and build a more ethical banking system.
However, there is still much to be done by the financial sector to support the country’s resilience and preparedness for climate-related challenges.
This requires strong collaboration between the public and private sectors across all industries and with international organisations, increased engagement in regional climate initiatives, and adequate allocation of financial resources towards delivering a positive impact for people and the planet.
The second edition of the Malaysian Banking Conference (MBC) — Banking and the ESG Revolution: Going Beyond Aspirations, jointly organised by AICB and ABM on 26 to 27 June 2023 at Shangri-La Kuala Lumpur featured insightful discussions, lively debates and generous knowledge-sharing on current ESG initiatives by the industry, key challenges faced by financial institutions, and opportunities to develop practical and impactful solutions in transition financing and risk management to accelerate the move to a greener, low-carbon economy.
As a platform to reinforce the importance of sustainable and responsible banking, the Conference convened government agencies, regulators, financial industry leaders and sustainability experts for a timely discourse on various key topics, including Malaysia’s climate initiatives; climate, biodiversity and transition risks; carbon markets; transition financing; social capital; technologies to support a just transition, and greening the value chain, among others.
In his welcome address, AICB Chairman Tan Sri Azman Hashim said “The financial sector plays a crucial role in driving the sustainable and climate agenda. As bankers, we have the power to reduce poverty, build communities, generate new job opportunities, and nurture an ESG-focused, future-forward workforce.
Building capability and capacity is crucial and AICB is focusing its efforts towards building these industry competencies through our professional qualifications and platforms such as this conference which can further support the financial sector and the nation to accelerate the transition into a low-carbon economy and strengthen public confidence.”
ABM Chairman, Dato’ Khairussaleh Ramli, said, “Banks in Malaysia have already begun to partner with their customers on their decarbonisation journey and I believe businesses will be compelled to broaden their perspectives – taking a financially-focused view to identify the impact of climate change on their business models beyond their own carbon footprint, and creating a domino effect across the entire value chain.”
He added that “As banks lead the charge in realising a just transition for their customers, they must not only address the ‘E’ and ‘G’ elements, but also the ‘S’ (Social) to take a holistic position and ensure that no one is left behind.”
Tengku Datuk Seri Utama Zafrul Tengku Abdul Aziz, Minister of Investment, Trade and Industry (MITI), who delivered the keynote address, said: “We can and must try to change potentially catastrophic climate-change effects on Malaysia. But the window for us to do so is getting smaller by the month. And it is only when there is a concerted public-private push that a nation can mobilise serious financing or capital to move the needle towards effectively decarbonising our economy and achieving our ESG agenda, while nurturing broad-based growth.
To that end, I sincerely hope that Malaysia’s financial industry will work closely with MITI to ramp up our collaborative efforts by being bolder and more aggressive on ESG financing and investments, especially for SMEs in our manufacturing, investments and trade value chains.”
Nik Nazmi Nik Ahmad, Minister of Natural Resources, Environment and Climate Change, in his special ministerial address urged Malaysian banks to take the lead in embracing sustainability.
“Whether via their operations, the products they offer and or the kind of business projects they fund, our banks must ‘green the finance and finance the green’. But we must also take care that we embrace the change of mindset, to not be driven solely by profit.”
He added, “Greenwashing, of superficially embracing sustainability without acting on what it entails, must be guarded against.”
WCBI 2023 will see the introduction of two new Standards, namely Treasury Risk Principles and Operational Risk and Resilience, which provide additional guidance on essential knowledge and competencies that are fundamental to the career of a professional banker.
The new Standards are closely aligned and build on the principles of GBEStB’s five existing Standards that are mutually supportive and form a comprehensive guide to understanding core banking principles.
