KUALA LUMPUR (Dec 4): Bank Negara Malaysia (BNM) and the World Bank Group (WBG) announced a collaboration to develop a financial risk assessment guide for Malaysian financial institutions and businesses to assess nature-related risks and impacts, and private capital mobilisation for nature-based solutions on Sunday (Dec 3).
These announcements were made at the United Nations Conference of the Parties (COP28) that is currently being held in Dubai, United Arab Emirates (UAE). The Malaysian government has set up a pavilion in the conference to showcase its sustainability initiatives.
“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,” said BNM governor Datuk Abdul Rasheed Ghaffour in a press release.
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 to identify and assess an organisation’s nature-related dependencies, impacts, risks and opportunities.
In 2022, BNM and the WBG released a report titled “An exploration of nature-related financial risks in Malaysia”, which highlighted how nature-related risks — such as from deterioration and loss of ecosystem services like clean water and excessive natural resources extraction — can cause financial and economic losses.
“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,” said the World Bank country director for Brunei, Malaysia, the Philippines and Thailand, Ndiame Diop.
The TNFD is a market-led initiative supported by governments and businesses, comprising 40 taskforce members. It aims to provide tools to organisations to act on nature-related issues, as society, business and finance depend on nature’s assets and services. However, the acceleration of nature loss globally is threatening the provision of these services and resources.
BNM will become a member of the TNFD forum, which is a global multidisciplinary consultative group.