Bank Negara Malaysia (BNM) expects at least half of new financing by banks to be aligned with climate supporting or transitioning activities by 2026 as part of the Financial Sector Blueprint.
This announcement was made by BNM Governor Datuk Abdul Rasheed Ghaffour at the JC3 Journey to Zero Conference 2023 today.
The governor also marked the launch of the JC3’s new website today, which features the improved Climate Data Catalogue. This expanded resource now has nearly 400 verified data sources, alongside additional tools and materials designed to close the significant data gaps in climate and environmental risk information.
Datuk Rasheed also emphasised the importance of SMEs in the transition to a sustainable economy. He announced the recent establishment of an SME Focus Group under the JC3.
This initiative aims to combine various efforts targeting SMEs, improve coordination, and engage with industry partners and organizations. The focus group will work with key ecosystem stakeholders to champion measures that boost technical capabilities, make it easier to get financing, and reduce the costs of the transition.
In a bid to amplify transition finance, the JC3 has initiated the Greening Value Chain (GVC) pilot programme, influencing change across more than eighty SMEs linked to four major corporates.
These SMEs are now actively assessing their greenhouse gas emissions, pinpointing areas of their operations with high emission levels, and some have even started providing emission reports to their corporate clients.
Furthermore, the JC3 has forged partnerships with training institutes to deliver specialised, climate-focused training to the financial sector, ensuring that professionals are well-equipped to navigate the complexities of climate-related challenges.
Datuk Abdul Rasheed shared that the industry has made a financial commitment of more than RM 200 billion for Environment, Social and Governance (ESG) purposes.
“While the amount is commendable, more is needed to fund the transition, not only from banks, but also capital market players. It is equally crucial for financial institutions to follow through on the integrity of these pledges by aligning commitments with actions and investments that are consistent with a just and orderly transition.
The bank remains focused on ensuring that the financial sector’s response to the climate challenge is compatible with both financial stability and inclusion outcomes – to forge a credible path forward for the country. We are mindful that this requires maintaining a delicate balance between development and risk management.”
