Malaysia Focuses on Nature, Transition Finance

Malaysia’s Joint Committee on Climate Change (JC3) has agreed to make further efforts to integrate considerations around nature and environmental risks within the development of climate strategies by financial institutions. Building on policies announced by the Malaysian government, the JC3 said it will serve as a “key platform” to promote the financial sector’s alignment on sectoral transition pathways. At its 12th meeting, the JC3 also agreed that a key focus area of its activities in the coming year will be on supporting the financial industry’s development of credible transition plans. “As more financial institutions have set climate targets, it is crucial for financial institutions to develop and execute concrete and credible transition plans that are aligned with these targets,” said Datuk Jessica Chew Cheng Lian, Deputy Governor of Bank Negara Malaysia (BNM) and Co-Chair of the JC3. “At the macro level, transition plans should reflect and be consistent with national and sectoral pathways. This is important to ensure financial support for transition and adaptation activities and mitigate the effects of short-term dislocations to the economy.” The JC3 work will include the development and publication of a Transition Finance Framework to guide the development of credible transition finance solutions. At the meeting, JC3 members also endorsed plans to increase financial flows for climate transition and adaptation, and build resilience against climate-related risks. They also acknowledged the need to expand public-private partnerships and blended finance structures to mobilise capital, and pledged to work on sector-focused strategies and data priorities to achieve this.

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