Environment and social factors are exerting an increasingly greater influence over companies’ performance and valuations. Global investors are calling for the mandatory inclusion of climate risk disclosures in the financial accounts of companies, banks and investors when providing information to their stakeholders. For financial institutions, regulators are also pushing for the adoption of reporting standards recommended by the Task Force on Climate-related Financial Disclosures (TCFD) The Malaysian bourse (Bursa Malaysia) has initiated a sustainability reporting requirement for all listed companies while the Securities Commission Malaysia (SC)’s Malaysian Code on Corporate Governance also recommends that the boards of public listed companies incorporate sustainability in their growth and business strategies.
The following are policies that provide a regulatory framework which facilitates the enhancement of green, social and sustainable financing. These will, in turn, thrust sustainable finance into the mainstream and fuel further diversity by encouraging more issuance from a wider range of sustainable projects that generate a positive and sustainable impact on the economy, the community and the environment.
Sustainable businesses are redefining the corporate ecosystem by designing models that create value for all stakeholders. Investing in sustainability will drive innovation and create new business opportunities that meet environmental standards and social needs.
Environmental, social and governance (ESG) goals promote responsible behaviour and can create value to stakeholders while ensuring Malaysia is on track towards meeting its commitments under the Paris Agreement. The Green Technology Financing Scheme to encourage the private sector to participate in green technology has been extended under Budget 2021, the creation of funded or financed diversified environmental and social projects.