Environment and social factors are having a greater influence over a company’s future performance and valuation. Global investors are calling for mandatory inclusion on climate risk disclosures in financial accounts from companies, banks and investors in providing information to stakeholders. Regulators are also pushing for the adoption of reporting standards as recommended by the Task Force on Climate-related Financial Disclosures (TCFD) among financial institutions. The Malaysian bourse (Bursa Malaysia) have initiated a sustainability reporting requirement for all listed companies and The Malaysian Code on Corporate Governance (MCCG) by the Securities Commission Malaysia (SC) also recommends the Board for public listed companies (PLC) incorporate sustainability in its growth and strategies.
Below are policies that provide a regulatory framework that facilitate the enhancement of green, social and sustainable financing which in turn would mainstream sustainable finance and drive Malaysia’s market to further diversify by encouraging more issuances from a wider range of sustainable projects that generate positive and sustainable impact to the economy, community and the environment.
Sustainable businesses are redefining the corporate ecosystem by designing models that create value for all stakeholders. Investing on sustainability not only will drive innovation, but also creates new business opportunities that meet environmental standards and social needs.
Environmental, Social and Governance (ESG) performance promotes responsible behaviour and can create value to stakeholders while ensuring Malaysia is on track to meet its commitments under the Paris Agreement. Maintaining this momentum, budget 2021 saw the extension of the Green Technology Financing Scheme (GTFS) to encourage the private sector to participate in Green technology by creating diversified environmental and social projects that is funded or financed.