PETALING JAYA: Bank Negara Malaysia (BNM) and Securities Commission Malaysia’s (SC) Joint Committee on Climate Change (JC3) has recognised the urgency for financial institutions in Malaysia to accelerate their efforts to manage climate-related risks, and will be building upon initiatives completed last year to drive further changes.
In a joint statement, the regulators said JC3 will further develop these initiatives to strengthen the industry’s capacity to manage climate-related risks and enhance its role in scaling up green finance.
Priorities include the development of guidance documents on risk management and scenario analysis, which will complement the climate change and principles-based taxonomy (CCPT) and advance climate risk management and stress-testing practices in the financial sector.
JC3 will also support voluntary implementation of climate-related disclosures that are aligned with the taskforce on climate-related financial disclosures (TCFD) recommendations, including cooperating with the industry contextualise the recommendations to the Malaysian economy and financial system as well as developing practical resources to help firms that interact with financial institutions improve their disclosures.
In addition, it will broaden engagement with relevant stakeholders to identify and address enabling conditions for the structuring of green financial products and solutions.
The committee will also deepen technical capacity-building programmes, focusing on strengthening practical knowledge and tools to support climate-related disclosures, climate risk management and climate scenario analysis. Furthermore, it will organise a follow-up event to the 2019 Regional Conference on Climate Change, which launched JC3, in the second half of the year.
Aside from that, it has agreed to establish a dedicated data workstream to identify crucial climate and environmental-related data along with the relevant data sources, as well as solutions to bridge the data gaps.
JC3 opined that this data workstream will also contribute towards more consistent implementation of the CCPT.
As for its commitment towards a wider adoption of TCFD recommendations, the committee members will step up effort to implement TCFD disclosures in phases starting this year.
The members also agreed to identify specific business initiatives that support sustainable activities and pursue the adoption of internal financial targets for sustainability-related loans and financing, and assets under management.
To recap, last year, its sub-committee completed several key initiatives for financial institutions, including a broad-based consultation and pilot implementation of the CCPT, a stock-take on disclosure practices of selected institutions against recommendations of the TCFD and a gap analysis on the green finance landscape.
The JC3 will organise a follow-up event to the 2019 Regional Conference on Climate Change in the second half of this year. Picture for representational purposes only. – AFPPIX
Source: The Sun Daily
No comments:
Post a Comment