Malaysia’s focus on ESG and finance aligns with its role as the global leader in sukuk (Shariah-compliant bonds), a convergence of sustainable finance and Islamic finance, which promotes sustainable development through the principles of fairness, equality, and ethics. This holistic approach in supporting, identifying, regulating, and measuring the impact of Malaysia’s sustainable finance projects and players, has broad and high-level support from key regulatory agencies and policymakers that oversee the robust Sustainable Finance sector including the central bank Bank Negara Malaysia (BNM), the Securities Commission Malaysia (SC), and the local bourse operator Bursa Malaysia.
Malaysian corporations and financial sector actors are keen to contribute to the country’s sustainable finance aspirations but require appropriate and updated guardrails, quantifiable benchmarks, metrics, and classification frameworks to build their reporting around their Sustainable Finance activities. BNM, SC, and Bursa Malaysia have been spearheading the rapid development of the country’s sustainable finance policies in recent years, in response to increased demand for clear governance and accountability roadmaps from the international investing community, Malaysian sustainable Islamic finance participants, corporations and lenders adopting ESG principles, and ESG-related project owners alike.
Key Sustainable Finance Policies and Guidance
|Securities Commission Malaysia||Capital Market Masterplan 3 (2021 to 2025)|
|Sustainable and Responsible Investment (SRI) Sukuk Framework|
|Sustainable and Responsible Investment Linked (SRI-Linked) Sukuk Framework|
|Guidelines on Sustainable and Responsible Investment (SRI) Funds|
|SRI Sukuk in Malaysia|
|Islamic Fund and Wealth Management Blueprint|
|Waqf-featured Fund Framework|
|Corporate Governance Strategic Priorities (2021 to 2023)|
|Capital Markets Malaysia||Simplified ESG Disclosure Guide for Malaysian SMEs (to be published by 2023)|
|Bursa Malaysia||Sustainability Reporting Guide and Toolkits|
|Bank Negara Malaysia||Financial Sector Blueprint 2022-2026|
|Value-based Intermediation Financing and Investment Impact Assessment Framework|
|Value-based Intermediation Strategy Paper|