MALAYSIA is accelerating its sustainable finance agenda as regulators move to strengthen climate reporting, unlock funding for climate and nature-related projects and align the country’s sustainable finance classification system with the ASEAN Taxonomy.
The Joint Committee on Climate Change (JC3), jointly chaired by Bank Negara Malaysia and the Securities Commission Malaysia (SC), reaffirmed the need to move faster from climate commitments to practical solutions at its 17th meeting on Aug 6.
The committee identified energy transition, climate resilience, particularly against floods, and stronger mechanisms to measure and report outcomes as key priorities.
To support implementation of the National Sustainability Reporting Framework (NSRF), JC3 has issued NSRF Guidance Documents for Banks and Insurers and Takaful Operators.
The guidance is designed to make sustainability-related disclosures more robust, consistent, comparable and purposeful, while addressing common implementation challenges involving risk and opportunity assessments, strategy disclosures, and the use of metrics and targets.
Hands-on capacity-building programmes are scheduled to begin in October to help financial institutions, insurers and takaful operators implement the framework, a joint statement issued by BNM and the SC said.
Securities Commission Malaysia Chief Sustainability Officer Neetasha Rauf said the guidance would help financial institutions, insurers and takaful operators navigate reporting challenges and improve the quality of sustainability disclosures.
"The NSRF Guidance Documents will help financial institutions and insurers and takaful operators navigate reporting challenges and support their transition towards high-quality, decision-useful sustainability disclosures. It also complements the efforts of the Advisory Committee on Sustainability Reporting (ACSR) in providing implementation and capacity-building support for scoped-in entities," said Neetasha, who is also the JC3 Co-Chair.
JC3 also noted further progress under the Climate Finance Innovation Lab (CFIL), which connects climate and nature-related projects with potential funding opportunities.
The second CFIL cohort comprises 22 projects seeking a combined RM1.73 billion in funding. They will undergo a structured accelerator programme in collaboration with the United Nations Global Compact Network Malaysia, Brunei and Cambodia.
The programme will focus on refining business models, assessing impact and facilitating access to funding, while potential funders have been encouraged to engage with CFIL to help scale climate- and nature-related solutions.
In a major step towards greater regional alignment, JC3 members also agreed to fully adopt the ASEAN Taxonomy for Sustainable Finance as the foundation of the Malaysia Taxonomy.
The move is expected to enhance interoperability, consistency and comparability across the region while reducing the operational burden on businesses, particularly those engaged in cross-border trade.
The JC3 is a platform established in September 2019 to pursue collaborative actions for building climate resilience within the Malaysian financial sector.
JC3 will develop practical guidance and tools tailored to Malaysia’s needs, with a pilot involving selected members to take place before full adoption for reporting in 2028.
The pilot will help identify implementation challenges and inform further refinements where necessary.
Bank Negara Malaysia Assistant Governor and Co-Chair of the JC3 Madelena Mohamed said the effectiveness of the taxonomy would ultimately depend on its consistent application.
"A taxonomy is only effective if it can be applied consistently and confidently. As Malaysia adopts the ASEAN Taxonomy as the foundation of the Malaysia Taxonomy, JC3 will focus on developing practical implementation guidance and tools to support its use. The pilot will help identify operational challenges early and ensure the framework remains fit for purpose and relevant for Malaysia’s needs," she said.
JC3 will also explore the creation of a centralised climate and nature-related data platform to strengthen implementation of the Malaysia Taxonomy and support the expansion of sustainable finance.
Improved access to reliable data would enable financial institutions, businesses and investors to better assess climate-related risks and opportunities, meet reporting requirements and direct capital towards sustainable and transition activities.
Meanwhile, the JC3 Journey to Zero Conference (JC3 J20), a flagship JC3 event, will be held on Sept 28 and 29 at Sasana Kijang.
The conference will bring together policymakers, financial institutions, investors and other stakeholders to discuss practical ways of scaling transition and adaptation finance, share implementation experiences and challenges, and identify solutions capable of delivering measurable outcomes. - August 13, 2026
