SUSTAINABLE FINANCE INITIATIVES

Initiatives

Through multi-stakeholder cooperation, the Malaysian Sustainable Finance Initiative (MSFI) and other players have been steadily working on efforts to support, push for, and highlight the importance of sustainable finance in the country. As nations strive to reach ambitious sustainability goals and incentives, the need for policy tools, initiatives and incentives cannot be overstated. There exist several sustainable finance initiatives and product innovations within the ASEAN region and Malaysia.

Sustainable Finance Initiatives in ASEAN

Various sustainable finance initiatives in ASEAN exist, spearheaded by the ASEAN Capital Markets Forum (ACMF). A summary of these initiatives is listed in the table below:
Initiative Summary Publication Date Objectives Key stakeholders
ASEAN Sustainable and Responsible Fund Standards The ACMF has developed the ASEAN Sustainable and Responsible Fund Standards (ASEAN SRFS) to further expand the sustainable asset class in ASEAN that comprises equity, bonds and funds. October 2022
  • Provide minimum disclosure and reporting requirements applied to collective investment scheme (CIS).
  • Enhance transparency and uniformity of CIS under ASRFS.
 Public sector, financial institutions
ASEAN Green Bond Standards The ASEAN Green Bonds Standards is an initiative that facilitates ASEAN capital markets in tapping green finance to support sustainable regional growth and meet investor interest for green investments and is part of the ACMF's broader efforts in developing green finance for the region. March 2019
  • Provide additional guidance on the application of Green Bond Principles (GBP).
  • Enhance transparency, consistency, and uniformity of ASEAN Green Bonds.
 Public sector, financial institutions, environmental institutions
ASEAN Sustainability-Linked Bond Standards The ACMF has developed the ASEAN Sustainability-Linked Bond Standards (ASEAN SLBS) to facilitate the role sustainability-linked bonds can play in funding companies that contribute to sustainability. October 2020
  • Provide additional guidance on the application of Sustainability-Linked Bond Principles (SLBP)
  • Enhance transparency, consistency, and uniformity of ASEAN Sustainability-Linked Bonds.
 Public sector, financial institutions, investors
ASEAN Sustainability Bond Standards The ASEAN SUS are developed based on the International Capital Market Association (ICMA)'s Sustainability Bond Guidelines. March 2019
  • Provide guidance on the issuance of ASEAN Sustainability Bonds.
 Public sector, financial institutions, investors
ASEAN Social Bonds Standards To support ASEAN's sustainable development needs, the ACMF has developed the ASEAN Social Bond Standards (ASEAN SBS) to complement the ASEAN Green Bond Standards that were first introduced in November 2017. March 2019
  • Provide additional guidance on the application of Social Bond Principles (SBP).
  • Enhance transparency, consistency and uniformity of ASEAN Social Bonds.
Public sector, investors, service providers
ASEAN Taxonomy for Sustainable Finance The ASEAN Taxonomy represents the collective commitment of ASEAN Member States (AMS) in transitioning towards a sustainable region. It is designed to be an inclusive and credible classification system for sustainable activities and will be one of the key building blocks in attracting investments and financial flows into sustainable projects in the region. May 2021
  • Climate change and adaptation.
  • Protection of healthy ecosystem and biodiversity.
  • Promotion of resource resilience and transition to circular economy.
Public sector, financial institutions, environmental institutions

Sustainable Finance Initiatives in Malaysia

To bring sustainable finance to the next level, involvement of more key players such as state governments, municipals and banking institutions is needed while relevant stakeholders should also expand their scope. Various sustainable finance initiatives in Malaysia exist, led by the Securities Commission Malaysia (SC), together with other bodies. A summary of these initiatives is listed in the table below:

Initiative Summary Launch Date Objectives Key stakeholders
Malaysian Green Financing Taskforce (MGFT) In 2019, the SC was appointed by Ministry of Energy, Science, Technology, Environment and Climate Change, (MESTECC) to form the Malaysian Green Financing Taskforce (MGFT) aimed to provide recommendations and action plans on how to accelerate the growth of green financing, particularly in renewable energy. 2019
  • To study, evaluate, make recommendations, and action plans on its renewable energy and energy efficiency initiatives.
 Financial regulators, institutional investors, banks, asset managers and public sector
Joint Committee on Climate Change (JC3) The Joint Committee on Climate Change (JC3) issued the Climate Data Catalogue which served as a source of reference on climate and environmental data for the financial sector and represents a call to action for stakeholders to collectively improve the availability and accessibility of climate data. December 2022
  • To identify available climate data sources.
  • To support various use cases by the financial sector.
  • To collaborate with relevant stakeholders to bridge data gaps.
Public sector, financial institutions
Discussion Paper on Climate Change and Principle-Based Taxonomy The discussion paper aims to provide an overview of climate change and its impact on the financial system and act as a guide to facilitate financial institutions in identifying and classifying their economic activities. December 2019
  • Increase awareness of climate change.
  • Identify economic activities that contribute to climate change objectives.
 Public sector, financial institutions, environmental institutions
FTSE4Good Bursa Malaysia Index The index has been designed to identify Malaysian companies with recognised corporate responsibility practices, expanding the range of the benchmarks of the FTSE Bursa Malaysia Index Series for the Malaysian Markets. December 2014
  • Support investors in making ESG investments in Malaysian listed companies.
  • Increase the profile and exposure of companies with leading ESG practices.
  • Encourage best practice disclosure.
  • Support the transition to a low carbon and sustainable economy.
 Public sector, financial institutions, investors, environmental institutions

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