Sunday, December 3, 2023

BNM: M’sian Islamic finance advancements springboard to green financing

KUALA LUMPUR: Malaysia’s advancements in Islamic finance have provided an important springboard to grow and expand transition and green finance, Bank Negara Malaysia (BNM) governor Datuk Abdul Rasheed Ghaffour said.

With a mature Islamic finance ecosystem, dynamic and resilient players, diverse products, and comprehensive enabling infrastructure, he said Malaysia is well-poised to play an important role in addressing the financing needs of climate challenge.

“We see the climate agenda not only as a pressing challenge but as an opportunity for growth. Through the National Energy Transition Roadmap, the Hydrogen Economy and Technology Roadmap, and the New Industrial Master Plan, Malaysia is taking concrete steps that will enable us to advance sustainable practices across the economy.

“This is consistent with a just and orderly climate transition,” he said in his opening address at Malaysia’s Climate Finance Day at the 28th Conference of Parties (COP28) in the United Arab Emirates today.

To fully harness the Islamic finance proposition, Abdul Rasheed said, value-based intermediation (VBI) was introduced in 2018 to reinforce efforts to embed sustainability elements in finance.

Since then, he said, the industry, in collaboration with BNM, has issued detailed sectoral guides to conduct environmental, social and governance assessments at a granular level.

Today, he said, VBI is closely integrated with and complements broader efforts to elevate banking and financial practices of all financial institutions – Islamic or otherwise – to address contemporary challenges in the world, including the climate emergency.

“For BNM, preparing the economy and financial system to become more climate-resilient is not only consistent with, but integral to discharging our mandate to promote monetary and financial stability that is conducive for the sustainable growth of the Malaysian economy.

“Effective and coordinated implementation of national and sector-level transition plans by the government is crucial. It addresses a key condition for Malaysia to benefit from the opportunities offered by the green transition,” he said.

This, he said, can be achieved by reducing strategic and policy risks for investments in the green transition and effecting partnerships between the public and private sectors, which would mean better higher skilled jobs, more sustainable and higher income, as well as overall shared prosperity.

“The Malaysian financial sector is working closely with the government as part of a whole-of-nation approach to turn these plans into reality. Significant efforts have been invested in strengthening our collective capacity, institutional frameworks and coordination arrangements that will drive financial flows towards Malaysia’s climate transition efforts,” he said. – Bernama



Source: The Sun Daily

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