Chaired by the Securities Commission, the Advisory Committee on Sustainability Reporting has planned to announce the National Sustainability Reporting Framework in the second half of this year.
PETALING JAYA: The Securities Commission Malaysia (SC) has called on the financial sector, including the capital market, to support funding for businesses to become greener and more resilient, in the transition to a low-carbon economy.
SC managing director Kamarudin Hashim stated that Malaysia would need between RM1.2 trillion and RM1.3 trillion in funding, which includes investments in renewable energy, energy efficiency, and green mobility, to achieve its energy transition goals by 2050.
“Achieving this will require collective efforts across several sectors, with regulators leading coalitions and fostering collaboration to facilitate a smooth transition,” he said in his keynote address at the Kuala Lumpur International Sustainability Conference.
Kamarudin said the financial sector, particularly the capital market, would continue to facilitate the financing and investments needed to support the country’s priorities and commitments.
He said that to facilitate fundraising, the availability of reliable and comparable sustainability-related information would be critical.
On that note, he said the Advisory Committee on Sustainability Reporting, formed last year with the endorsement of the finance ministry and chaired by the SC, has been looking into the use of the sustainability disclosure standards issued by the International Sustainability Standards Board (ISSB) as the baseline standards for disclosures by Malaysian corporate bodies.
“The SC, together with fellow committee members had undertaken extensive engagements with stakeholders via a public and focus group discussions with the relevant ministries and agencies.
“It was important that we canvass and syndicate as much feedback as possible from these stakeholders to design the National Sustainability Reporting Framework (NSRF),” he said.
Kamarudin said the insights gathered from these engagements underscore the importance of balancing multiple considerations, including the timing for implementation, which companies to scope in, and the overall readiness of the ecosystem.
“More than 20 jurisdictions representing nearly 55% of the global gross domestic product have decided to use or are taking steps to use the ISSB standards, bringing us closer to having a common language for communicating on sustainability.
“Our primary driver is to ensure Malaysia’s competitiveness as an exporting country is secured as well as the contribution of our companies in the global supply chain.
“The committee aims to announce the approach for the NSRF in the second half of this year,” he said.
Moving forward, he said the SC will work on the next iteration of the principles-based Sustainable and Responsible Investment (SRI) Taxonomy for the Malaysian Capital Market that will provide greater guidance to the industry, which includes future refinements of the SRI Taxonomy and development of more detailed guidance that is consistent with national policies.
“In recent years, we have also seen a growing recognition of the importance of incorporating sustainability considerations into investments, particularly in private markets.
“However, private market participants in Malaysia are still in the early stages of understanding this importance.
“One of the major challenges they face is the lack of clear guidance and best practices, which means that the integration of sustainability in investment and due diligence processes is still nascent,” he noted.
Recognising this need and in line with the SC’s recommendation outlined in the SRI Roadmap to broaden access to SRI via alternative funding avenues, Kamarudin said the SC issued the SRI Guide for Private Markets in December 2023.
Additionally, he encouraged regulators, corporations, academia, and civil society to collaborate and coordinate their actions to drive meaningful change.
Source link