This article first appeared in Forum, The Edge Malaysia Weekly on February 24, 2025 - March 2, 2025

Climate Governance Malaysia (CGM) recently submitted feedback to the Ministry of Natural Resources and Environment on the climate change bill (RUUPIN or Rang Undang-Undang Perubahan Iklim Negara).

Malaysia’s proposed climate change bill seeks to establish a framework for national climate action in alignment with the Paris Agreement. In our submission, CGM outlined key concerns and recommendations regarding RUUPIN’s scope, governance, emissions management, climate resilience and data transparency, and took into account regional considerations.

RUUPIN is intended to be Malaysia’s overarching climate legislation, granting the Ministry of Natural Resources, Environment and Climate Change (NRES) authority to oversee and regulate climate actions.

CGM acknowledges the importance of a legal framework but stresses the need for urgency in language, recommending the term “climate crisis” instead of “climate change” to reflect the severity of environmental threats. We argue that adaptation should be central to the bill, ensuring proactive measures against extreme weather, rising sea levels and food insecurity.

Businesses and industries are not able to make informed decisions on adaptation measures and increasing resilience without access to datasets. To this end, CGM has been engaging with multiple key stakeholders for almost two years to propose a National Climate Risks Dashboard. A group of CGM volunteers have demonstrated the initial design of an aggregator platform, utilising business intelligence software, but access to datasets has proved challenging.

We emphasise the need for policy coherence, urging alignment with multiple strands of initiatives including Carbon Capture Utilisation and Storage (CCUS) legislation, biomass strategies, protection of our mega-biodiversity (including marine coastline) and land use regulations. We also highlight the importance of soil and land use management in safeguarding carbon sinks and enhancing long-term environmental resilience.

RUUPIN grants significant power to the NRES Minister Nik Nazmi Nik Ahmad, which CGM supports but believes this delegation of authority needs to be accompanied with far greater transparency and accountability. We recommend a clear framework for responsibility, particularly in high-cost, high-risk projects like CCUS.

CGM calls for an independent government-funded multi-stakeholder Climate Change Commission to monitor implementation and ensure accountability for both government agencies and private sector actors, tasked with regular reporting on the progress of climate action. We stress the necessity of inter-ministerial collaboration, arguing that NRES alone would not be able to drive effective climate action. CGM proposes explicit mechanisms for coordination with key line ministries, including finance, energy and agriculture, to prevent conflicts and facilitate policy cohesion.

CGM supports RUUPIN’s focus on emissions regulation but recognises that mandatory emissions reporting is long overdue, especially for large emitters. We stress that Scope 3 emissions — indirect emissions from supply chains — should be included in reporting obligations.

CGM recommends setting industry-specific emissions thresholds to ensure practical but ambitious reporting. We advocate for a National Integrated Climate Data Repository (NICDR) to make emissions data publicly accessible, fostering transparency and informed decision-making.

Additionally, we call for standardised greenhouse gas calculators and reporting tools to assist small and medium enterprises in emissions measurement and reduction. We should also be prepared to implement far more granular and specific emission factors.

CGM underscores the need for integrating climate adaptation measures into RUUPIN to address Malaysia’s growing vulnerability to climate-related disasters. We advocate for investment in meteorological infrastructure, satellite imaging and early warning systems to enhance disaster preparedness.

CGM calls for comprehensive climate risk assessments to identify vulnerable regions and guide resilience-focused policies in urban planning, coastal management and agriculture. We also propose structured compensation mechanisms to assist communities affected by climate disasters, emphasising the importance of integrating climate resilience into Malaysia’s broader economic policies.

Separately, reporting entities are developing their own climate scenarios. We have called for one entity (ideally a regulator such as the central bank) to develop national level climate scenarios which all reporting entities could adopt, which would also facilitate informed allocation of capital.

CGM highlights Sabah and Sarawak’s critical role in Malaysia’s climate governance, given their extensive carbon sinks and biodiversity. We argue that Sabah and Sarawak must be given equal representation and decision-making authority in national climate policies to ensure their concerns are addressed. CGM calls for dedicated climate funding for Sabah and Sarawak, recognising their distinct environmental challenges.

Additionally, we emphasise the need for region-specific carbon market mechanisms to prevent Sabah and Sarawak from being disadvantaged in emissions trading schemes. Independent climate monitoring systems should be implemented to enable local authorities to conduct their own assessments and policy planning.

While RUUPIN includes provisions for Emissions Trading Schemes and Voluntary Carbon Markets, CGM argues that a carbon tax should also be considered to enhance market effectiveness. We stress that any revenue from carbon pricing must be transparently allocated toward mitigation and adaptation efforts, as there might be a temptation to divert a new source of public income.

CGM warns of the risks of carbon credit greenwashing, advocating for strict adherence to international carbon offset standards. We call for stronger safeguards against the exploitation of carbon sinks, ensuring that conservation efforts are not undermined by loopholes in carbon offset regulations.

CGM strongly advocates for stricter protections for Malaysia’s forests, peatlands, and mangroves. We argue that deforestation should be curtailed through stronger legal mechanisms and a firm commitment to No Deforestation, No Peat, No Exploitation policies.

This stand is aligned with the National Physical Plan, in particular, the proposal for all marine coastline to be protected with specific areas carved out for economic activities.

CGM calls for stricter licensing requirements for natural resource extraction, ensuring logging and mining activities undergo rigorous environmental assessments. We emphasise the need for improved land use planning that integrates forestry and agricultural policies to maximise carbon sequestration and biodiversity conservation.

CGM stresses the importance of democratising access to climate data. We support the establishment of the NICDR but insist that it must be fully transparent and accessible to all stakeholders, including researchers, businesses and the public.

CGM has championed the development of a National Climate Risks Dashboard since 2023, envisioning a centralised platform to aggregate, analyse and visualise critical climate risk data through advanced business intelligence frameworks. While initial progress has been made in designing the dashboard’s architecture, persistent challenges in accessing comprehensive, standardised and interoperable datasets have hindered its full realisation.

We strongly endorse the recent proposal outlined in RUUPIN to consolidate public access to climate risk datasets and advocate for these resources to be freely available to all stakeholders, including policymakers, researchers, businesses, and communities.

Specifically, CGM calls for mandatory data-sharing regulations across government agencies to eliminate data silos. Consolidating key climate data will assist policymakers, regulators and businesses to assess and respond to environmental risks.

Reforms are also long overdue to Malaysia’s environmental impact assessment process to increase transparency, ensure all conditions are met prior to project commencement or financing facilities being made available including ideally, being nature positive, including compensating for damage to the environment. This will help ensure that climate risks are systematically considered in all development projects.

CGM supports the creation of a national climate fund but emphasises the need for diversified funding sources, including contributions from carbon pricing, international grants and private sector investments. We stress that part of the fund should be allocated to loss and damage compensation for communities impacted by climate disasters. CGM calls for transparent fund management, with clear allocation guidelines to ensure accountability.

We also recommend aligning Malaysia’s climate finance strategies with global best practices, including partnerships with the Coalition of Finance Ministers for Climate Action.

CGM insists that strict compliance mechanisms must be embedded within RUUPIN to ensure its effectiveness. We call for strong penalties against entities that fail to meet emissions targets or violate environmental regulations. CGM advocates for mandatory facility-level emissions reporting to improve oversight of high-emission industries. We also stress that government officials responsible for climate policy must be held accountable for meeting national climate targets, including protecting carbon sinks.

CGM supports establishing an independent oversight body, such as the Climate Change Commission, to monitor compliance and ensure enforcement.

CGM supports RUUPIN’s intent but stresses that the bill must be strengthened to deliver meaningful climate action. We highlight critical gaps in governance, emissions accountability, climate resilience and data transparency that must be addressed to ensure the bill’s effectiveness.

CGM argues that RUUPIN has the potential to set a transformative precedent for Malaysia’s climate governance, but its success will depend on a robust regulatory framework, strong accountability mechanisms and an inclusive multi-stakeholder approach.

This column is part of a series coordinated by Climate Governance Malaysia, the national chapter of the World Economic Forum’s Climate Governance Initiative (CGI). The CGI is an effort to support boards of directors in discharging their duty of care as long-term stewards of the companies they oversee, specifically to ensure that climate risks and opportunities are adequately addressed.

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