What sustainable finance can support
Energy is part of the picture, alongside water, waste, transport, buildings, nature and social needs. Your starting point could be an improvement like one of these:
Scroll sideways to read the table ↔
| Project area | An improvement to explore |
|---|---|
| Energy | Generate renewable power or reduce energy use |
| Buildings | Improve efficiency through equipment upgrades or retrofits |
| Transport | Develop cleaner fleets, public transport or charging infrastructure |
| Water | Reduce water use or improve treatment and wastewater management |
| Waste and materials | Prevent waste, recover materials or support reuse |
| Nature and land | Protect biodiversity or improve land management |
| Social needs | Improve access to essential services, affordable housing or opportunities |
| Climate resilience | Help people or businesses cope with climate risks |
The Securities Commission Malaysia (SC) lists environmental and social themes in the current SRI sukuk provisions, Chapter 7; SRI means Sustainable and Responsible Investment. Use the examples above to frame your proposal. Eligibility depends on the applicable framework, project design and product terms.
Make sense of the financing labels
Two questions help here: where will the money go, and what commitments come with it? Some structures fund particular projects. Others link financing terms to progress against agreed targets.
Green financing funds eligible environmental projects. For a green loan, the use of the money is central to the structure. The Green Loan Principles explain this approach.
Social financing funds eligible social projects, with attention to the people they are intended to benefit. The Social Bond Principles describe this for social bonds.
Sustainability bonds combine green and social project purposes. ICMA's Sustainability Bond Guidelines explain how those purposes fit together.
Sustainability-linked financing ties financing terms to agreed performance goals. For example, SRI-linked sukuk can change financial or structural characteristics depending on whether predefined sustainability objectives are met. The SC's linked-sukuk FAQ explains the structure.
Transition finance concerns the investments and changes a business needs along a credible transition pathway. The plan, milestones and evidence behind the change matter. Our transition-finance guide explores those questions.
Match the financing route to your business
Once the purpose is clear, consider how to fund it.
A bank loan or Islamic financing facility may suit a business asset or project. Bonds and sukuk raise funds from investors; sukuk are Islamic capital-market instruments. These routes have their own issuance, disclosure and reporting requirements. You can find the relevant frameworks in the SC's SRI resource hub.
Your cash flow matters as much as your project purpose. Consider what you can repay, when repayments will begin and what reporting commitments your team can manage. Our financing-route guide helps you work through those choices.
Responsible investment is the investor side of the picture: a fund may consider sustainability when deciding what to hold. If you're investing, examine its strategy, fees, disclosures and risks. The SC's SRI fund guidelines explain the qualification framework; the label does not promise a return.
Show what your project will change
Imagine your factory is replacing an old machine with one expected to use less electricity. A useful proposal brings together the purchase cost, existing energy use, expected improvement and repayment plan. It also explains how you will check the result once the machine is operating.
That gives a financier something concrete to assess. For a social project, the same habit applies: describe the need, who should benefit and how you will measure progress.
You may encounter a taxonomy, a framework for classifying economic activities. Bank Negara Malaysia's (BNM) Climate Change and Principle-based Taxonomy is one Malaysian reference. Classification helps assess the activity; the financier still needs to assess the lending proposal.
If you're an SME gathering environmental, social and governance (ESG) information, Capital Markets Malaysia's Simplified ESG Disclosure Guide, Version 2 can help you organise relevant data. Start with records you can substantiate and give someone responsibility for keeping them up to date.
Know where to look in Malaysia
You don't have to search every organisation at once. Follow the source that matches your question:
- For banking and SME support: BNM publishes climate resources and information on its SME funds.
- For bonds, sukuk and SRI funds: the SC's SRI resource hub brings together frameworks and publications.
- For a particular scheme or product: ask its administrator or financier about availability, eligibility, documents and terms.
Applications for BNM's SME funds go through participating financial institutions and remain subject to credit assessment. Use the official fund information to identify a route, then discuss your proposal with the relevant institution.
Where households and personal loans fit
For home solar, a green home or an electric vehicle, look at the financing offered for the specific purchase and read its disclosure sheet. Check the product's eligibility and sustainability criteria alongside the costs and repayments.
An ordinary personal loan needs its own assessment of affordability, costs and repayment. Using it for an environmentally useful purchase does not, by itself, establish that the loan meets a sustainable-finance framework.
For Islamic products, check both the financing structure and any sustainability criteria. Each tells you something different about the offer.