Sustainable finance refers to any form of financial process which supports economic growth and incorporates environmental, social and governance (ESG) considerations to drive sustainable development outcomes. Climate change is significantly impacting and altering the operating environment for firms, investors, and communities. At the same time, social issues such as fair wages and labour rights as well as good governance structures have come to the fore. These three concerns (Environmental, Social, and Governance) taken together, are key cogs in Malaysia’s goal to become a sustainable, inclusive nation.

The country’s regulators and policymakers build towards this common goal by aligning their efforts with the 17 UN Sustainable Development Goals (SDGs), an urgent call for action by all countries – developed and developing – in a global partnership. Malaysia is also a signatory to the 2015 Paris Agreement. One its key aims is to make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.

In addition, Malaysia is well established as a global leader in Islamic Finance, and this success has been largely developed over time with the efforts of the various players in enabling a facilitative ecosystem. In recent years, players, both in the conventional and Islamic finance space globally have accepted the alignment between sustainable and responsible investments (SRI), and Islamic finance investment and funding principles. Both the banking regulator and capital market regulator have laid a strong regulatory and policy framework to support intermediaries to leverage on their Islamic finance depth of expertise and experience to further develop sustainable finance in Malaysia.

To learn more about Malaysia’s burgeoning sustainable finance sector, please visit the links below.