• Financial risks assessment guide for Malaysian financial institutions and businesses to assess nature-related risks and impacts
• Private capital mobilisation for nature-based solutions

Bank Negara Malaysia (BNM) and the World Bank announced two key initiatives to enable the financial sector to support nature-positive outcomes. The announcements were made at COP28^[1] in conjunction with the Climate Finance Day at the Malaysia Pavilion in Dubai.

These initiatives will facilitate the integration of nature-related considerations into decision-making while supporting financial flows towards nature-based solutions. This follows from the recommendations outlined in the report ‘An Exploration of Nature-related Financial Risks in Malaysia’ released in 2022.

Bank Negara Malaysia Governor Datuk Abdul Rasheed Ghaffour said, “The partnership announced today is in recognition of the implications of nature-related risks to a megadiverse country like Malaysia. The collaboration sealed today will bring about greater alignment between financial flows and positive outcomes.“

The World Bank Country Director for Brunei, Malaysia, Philippines and Thailand Ndiame Diop said, “With this collaboration, Malaysia aims to develop robust measures to increase finance for the natural world, thereby setting a good example for other nations grappling with nature-related financial and economic risks.”
 

Nature-related financial risks assessment guide for Malaysian financial institutions and businesses

The risk assessment guide will be developed in consultation with the Taskforce on Nature-related Financial Disclosures (TNFD) Secretariat. The aim is to support Malaysian financial institutions and businesses in identifying and assessing an organisation's nature-related dependencies, impacts, risks and opportunities. The guide will be based on the integrated approach that TNFD has developed for the identification and assessment of nature-related issues, called the LEAP^[2] approach.

This consultation will follow BNM becoming a member of the TNFD Forum, a global multidisciplinary consultative group that is aligned with TNFD’s mission and principles.
 

Private capital mobilisation for nature-based solutions

BNM and the World Bank will facilitate the development of innovative financial instruments to support private investments in nature. This includes enabling regulations to support nature-positive outcomes and piloting new financial structures.

^[1] 28th United Nations Framework Convention on Climate Change Conference of Parties in Dubai, UAE.

^[2] The LEAP approach (Locate, Evaluate, Assess, Prepare) is an integrated process developed by TNFD to help organisations identify and assess nature-related impacts, dependencies, risks, and opportunities, even without formal disclosure (https://tnfd.global/publication/additional-guidance-on-assessment-of-nature-related-issues-the-leap-approach/)

Bank Negara Malaysia
03 December 2023