Bank Negara Malaysia and the World Bank have announced two key initiatives to enable the financial sector to support nature-positive outcomes which will facilitate the integration of nature-related considerations into decision-making while supporting financial flows towards nature-based solutions.
This follows from the recommendations outlined in the report ‘An Exploration of Nature-related Financial Risks in Malaysia’ released in 2022. Bank Negara Malaysia Governor Datuk Abdul Rasheed Ghaffour said, “The partnership announced today is in recognition of the implications of nature- related risks to a megadiverse country like Malaysia. The collaboration sealed today will bring about greater alignment between financial flows and positive outcomes.”
The World Bank Country Director for Brunei, Malaysia, Philippines and Thailand Ndiame Diop said, “With this collaboration, Malaysia aims to develop robust measures to increase finance for the natural world, thereby setting a good example for other nations grappling with nature-related financial and economic risks.”
A Nature-related financial risks assessment guide will be developed in consultation with the Taskforce on Nature-related Financial Disclosures (TNFD) Secretariat. The aim is to support Malaysian financial institutions and businesses in identifying and assessing an organisation’s nature-related dependencies, impacts, risks and opportunities. The guide will be based on the integrated approach that TNFD has developed for the identification and assessment of nature-related issues, called the LEAP2 approach.
This will also make BNM a member of the TNFD Forum, a global multidisciplinary consultative group that is aligned with TNFD’s mission and principles.
BNM and the World Bank will then facilitate the development of innovative financial instruments to support private investments in nature. This includes enabling regulations to support nature-positive outcomes and piloting new financial structures.
