JC3 Statement on its 9th Meeting

At this meeting, JC3 members approved the publication of the Data Catalogue and Accompanying Report (DC) on data availability, gaps and recommendations to bridge data gaps. The DC represents an important step toward addressing the critical data needs of the financial sector. It will serve as a source of reference on the availability and accessibility of climate and environmental data based on a priority list of financial sector use cases. Work on the DC has highlighted important data gaps, with only 49% of data items needed for the priority use cases currently available. Of this, the bulk of available data lacks sufficient granularity, or the data, while available, is not easily accessible nor comparable. Following the publication of the DC, JC3 will focus efforts in 2023 on working with relevant data providers to resolve data accessibility issues and improve the quality, comparability and consistency of existing data sources. Given the significant data gaps, JC3 also agreed to work with key data providers on strategies to substantially reduce the data gaps taking into consideration domestic and global developments on sustainability and climate-related disclosures[1]. The DC will be available at these links [1, 2] on 16 December 2022. 

As part of efforts to scale up green and sustainable finance, JC3 discussed plans to develop and launch several pilot programmes in 2023, which will be prioritised under its sub-committee on Product and Innovation. Jessica Chew, Deputy Governor of Bank Negara Malaysia and Co-Chair of JC3, said, “For SMEs, the recent launch of the Greening Value Chain programme by Bank Negara Malaysia in collaboration with JC3 is an example of a pilot project targeting SMEs that are part of global supply chains that will need to make long-term changes to green their operations. JC3 will actively seek out more pilot projects with high impacts on expanding sustainable and transition finance, including projects that can create positive demonstration effects and further develop the ecosystem for sustainable and transition finance. This is key for Malaysia to achieve Net Zero by 2050.”

JC3 will also continue to pursue the following priorities under its sub-committees on risk management, governance and disclosures, as well as engagement and capacity building in 2023:

• Expanding the use cases for the application of the Climate Change and Principle-based Taxonomy (CCPT) to include sector/project-specific use cases based on VBIAF[2] Sectoral Guides. JC3 will also undertake thematic reviews on financial institutions’ transition plans and climate practices, with the view to share leading practices and assess the implications of financial institutions’ transition plans for businesses, particularly in hard-to-abate sectors. 

• Aligning the TCFD[3] Application Guide for Malaysian Financial Institutions[4] with the International Sustainability Standards Board’s (ISSB) disclosure requirements upon its finalisation. JC3 is also supporting Capital Markets Malaysia (CMM), an affiliate of the Securities Commission Malaysia, to develop an ESG Disclosure Guide (Guide) tailored to Malaysian Small and Medium Enterprises (SMEs). The Guide will provide practical guidance and the baseline exposures expected of SMEs in relation to ESG to encourage greater transparency and improve the quality of SMEs’ ESG disclosures.

• Developing a Climate Change Curriculum for financial institutions to provide more curated and specialised climate-related training programmes. This aims to facilitate the development of structured training pathways for financial institutions to build technical capabilities across all levels in climate-related topics and developments. JC3 will work closely with potential training providers and explore relevant accreditations for the training curriculum to assure the quality of training and enable recognition of relevant training across the industry.

JC3 members also discussed the role of the financial sector in facilitating energy transition. The Economic Planning Unit (EPU) presented an overview of the recently released National Energy Policy (NEP) and its four strategic thrusts, one of which is to enhance the energy sector’s contribution towards environmental sustainability. JC3 members noted that it will be important to align the targets under the Low Carbon Nation Aspiration 2040 with Malaysia’s ambition to be a carbon-neutral nation by as early as 2050. JC3 members also exchanged views with PETRONAS on its net zero carbon emissions pathway and were briefed by Bursa Malaysia on the Voluntary Carbon Market that will be launched soon. According to Datuk Zainal Izlan Zainal Abidin, Deputy Chief Executive Securities Commission Malaysia and Co-Chair of JC3, “The policy and action plans by key actors in the energy sector will increase the urgency and need for financing and investment as one of the key enablers to support the implementation of strategic initiatives. The financial sector has a key role in providing green financing and sustainable investing, which JC3 is currently exploring to facilitate a just and orderly transition of the country.”

JC3 also welcomed six[5] new industry associations and the Labuan Financial Services Authority as observers.

Bank Negara Malaysia

Securities Commission Malaysia

7 December 2022

About the JC3

The JC3 is a platform established in September 2019 to pursue collaborative actions for building climate resilience within the Malaysia financial sector. The JC3 is co-chaired by Datuk Jessica Chew Cheng Lian, Deputy Governor Bank Negara Malaysia and Datuk Zainal Izlan Zainal Abidin, Deputy Chief Executive Securities Commission Malaysia with members comprising senior officials from Bursa Malaysia and 21 financial industry players. The JC3’s initiatives and priorities are undertaken by its five sub-committees, namely Risk Management; Governance and Disclosure; Product and Innovation; Engagement and Capacity Building; and Bridging Data Gaps.

Members: Allianz General Insurance Company (Malaysia) Berhad, AmBank (M) Berhad, Bank Islam Malaysia Berhad, Bank Pembangunan Malaysia Berhad, Bank Pertanian Malaysia Berhad (Agrobank), BIMB Investment Management Berhad, BNP Paribas Asset Management Sdn. Bhd., Bursa Malaysia Berhad, CIMB Bank Berhad, Etiqa Family Takaful Berhad, HSBC Amanah Malaysia Berhad, Kenanga Investors Berhad, Maybank Berhad, MIDF Amanah Investment Bank Berhad, MSIG Insurance (Malaysia) Berhad, RHB Islamic Bank Berhad, RHB Islamic International Asset Management Bhd., Standard Chartered Bank Malaysia Berhad, Swiss Re Asia Pte. Ltd. (Swiss Retakaful), Syarikat Takaful Malaysia Am Berhad, UOB Asset Management (Malaysia) Berhad and Zurich General Insurance Malaysia Berhad.

[1] Including standards issued by the International Sustainability Standards Board (ISSB) and mandatory TCFD-aligned disclosures by licensed financial institutions from 2024

[2] Value-based Intermediation Financing and Investment Impact Assessment Framework

[3] Task Force on Climate-related Financial Disclosures

[4] Issued on 29 June 2022

[5] Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), Association of Development Finance Institutions Malaysia (ADFIM), Malaysian Investment Banking Association (MIBA), Malaysian Takaful Association (MTA), The Federation of Investment Managers Malaysia (FIMM), Malaysian Association of Asset Managers (MMA)