Featured Product

    BNM Committee Furthers Work on Addressing Climate Change Risk

    August 03, 2021

    The Bank Negara Malaysia (BNM) highlighted that the Joint Committee on Climate Change (JC3) continues to advance initiatives to strengthen the financial sector’s capacity in managing climate-related risks. Post the August meeting of the Joint Committee, BNM and the Securities Commission Malaysia have published a joint statement on advancing the financial sector's response to climate risk. The statement notes that, this year, JC3 expects to publish the reference guides on climate risk management, scenario analysis, and climate-related disclosures. Following the successful virtual JC3 Flagship Conference "Finance for Change" in June 2021, the JC3 has also published a report on the key insights, discussion, and calls to action from the conference.

    The JC3 continues to actively collaborate and engage with the business community to support the financing needs of corporates and their supply chains in their transition to sustainable practices. The following are the key highlights of recent developments in this area:

    • Following the issuance of the Climate Change and Principle-Based Taxonomy (CCPT) in April 2021, a CCPT Implementation Group will be established to support its consistent and credible implementation by financial institutions. Twelve JC3 members have committed to early adoption of the CCPT, in advance of expectations for financial institutions regulated by BNM to classify and report their lending and investment activities in line with the CCPT from July 2022. The CCPT provides a common framework for the classification of climate risk-related exposures of financial institutions to support risk assessments and encourage financial flows towards greening the economy.   
    • JC3 members reviewed the progress of work undertaken to develop reference guides on climate risk management and scenario analysis and climate-related disclosures. The JC3 expects to publish the reference guides in the fourth quarter this year. Concurrently, work will be undertaken by the JC3 to produce relevant localized reference climate scenarios for Malaysia to improve the understanding of the physical and transition impact of climate change under different climate pathways. This in turn will support risk assessments, better alignment of business strategies with climate targets, and climate-related disclosures by financial institutions.
    • Members further discussed plans for the mandatory climate-related financial disclosures by financial institutions and details on these plans will be released by year-end.
    • The workplan of the newly established Sub-committee on Bridging Data Gaps was endorsed at the meeting. JC3 members supported the prioritization of the initial use cases by the Sub-committee, which include data to support investment and lending decisions, macroeconomic modeling, stress testing, scenario analysis, and product development. For the use cases, the Sub-committee will work with key public and private sector partners to identify critical data needs and map them to relevant data sources. The Sub-committee will create a catalog of climate data that can be accessed by the financial sector.
    • Members discussed the recently launched Kuala Lumpur Climate Action Plan 2050 and agreed to engage with the Kuala Lumpur City Hall (DBKL) to explore the opportunities for the financial sector in addressing the sustainable financing needs of the city.
    • Members also agreed to nominate JC3 representatives to the CEO Action Network (CAN), a coalition of corporate and SME CEOs committed to catalyzing and accelerating adoption of sustainable practices in corporate Malaysia and the business ecosystem. 

     

    Related Links

    Keywords: Asia Pacific, Malaysia, Banking, Climate Change Risk, ESG, Taxonomy, Sustainable Finance, Disclosures, Scenario Analysis, Stress Testing, Data Gaps, Macroeconomic Modeling, BNM

    Featured Experts
    Related Articles
    News

    EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models

    The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.

    June 21, 2022 WebPage Regulatory News
    News

    EP Reaches Agreement on Corporate Sustainability Reporting Directive

    The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).

    June 21, 2022 WebPage Regulatory News
    News

    PRA Consults on Model Risk Management Principles for Banks

    The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.

    June 21, 2022 WebPage Regulatory News
    News

    EC Regulation Amends Standards for Calculating Credit Risk Adjustments

    The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.

    June 21, 2022 WebPage Regulatory News
    News

    HKMA Announces Launch of Data Repository on Sustainable Finance

    The Hong Kong Monetary Authority (HKMA) announced that the Green and Sustainable Finance (GSF) Cross-Agency Steering Group has launched the information and data repositories and outlined the progress made in advancing the development of green and sustainable finance in Hong Kong.

    June 21, 2022 WebPage Regulatory News
    News

    BIS Hub Updates Work Program for 2022, Announces New Projects

    The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.

    June 17, 2022 WebPage Regulatory News
    News

    EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance

    The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.

    June 17, 2022 WebPage Regulatory News
    News

    NGFS Report on Integration of G-Cubed Model into NGFS Scenarios

    The Network for Greening the Financial System (NGFS) published a report that explores the feasibility of integrating the G-Cubed general equilibrium model into the NGFS suite of models.

    June 17, 2022 WebPage Regulatory News
    News

    US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule

    Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)

    June 16, 2022 WebPage Regulatory News
    News

    EIOPA Consults on Review of Securitization Framework in Solvency II

    The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.

    June 16, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8301