KUALA LUMPUR (April 8): Transition finance is essential in driving Malaysia’s shift towards a low-carbon economy, said Bursa Malaysia chairman Tan Sri Abdul Wahid Omar.

He said transition finance serves as a bridge that empowers traditionally high-carbon industries to shift towards sustainable business models.

“These include hard-to-abate industries like steel, cement and chemicals, which, while fundamental to the economy, are major contributors to the environmental footprint,” he said in a pre-recorded speech at the National Climate Governance Summit here on Tuesday. 

Transition finance refers to investments that support high-emission sectors like energy and manufacturing to gradually shift towards low-carbon, sustainable operations.

Abdul Wahid said around 20% of Malaysia’s economy is tied to high-emission sectors.

“The metal industry alone generates 23 million tonnes of carbon dioxide equivalent emissions, while the chemical and cement industries contribute nine million tonnes and 18 million pounds, respectively. The waste sector, meanwhile, emits 57 million pounds.

“Collectively, these sectors accounted for 32% of the country’s emissions in 2019,” he said.

He warned that without robust and targeted transition finance, these sectors will face difficulties in decarbonising and maintaining economic viability.

Abdul Wahid also cited findings by the International Renewable Energy Agency (Irena), which estimates that Asean will require US$29.4 trillion (RM131.87 trillion) to fund its energy transition by 2050.

“Disasters such as floods and extreme weather continue to disrupt economies and communities, with Southeast Asia experiencing more than 75 million internal displacements due to extreme weather events over the past decade,” he said.

Abdul Wahid also said that despite its importance, transition finance still faces significant challenges due to limited financial incentives and technological uncertainties.

“Addressing these challenges requires a concerted effort from policymakers, regulators, financial institutions and businesses.

“Simply put, the clearer we define and support transition finance, the faster we can mobilise the necessary investments, which is critical to achieving a low-carbon future,” he said. 

The National Climate Governance Summit is organised annually by Climate Governance Malaysia, to address climate change challenges through governance, financial responsibility, and policy intervention.

Read also:
Malaysia to continue with climate action, assisting businesses in sustainability reporting 

Uploaded by Liza Shireen Koshy