BNM, Asean partners to develop regional taxonomy

KUALA LUMPUR: Bank Negara Malaysia (BNM), together with its Asean partners, will steer the Asean Climate Change and Principle-based Taxonomy (CCPT) board to develop a regional taxonomy that caters to the differences in each member state’s unique financial system and economic transition path.

BNM assistant governor Fraziali Ismail said the central bank recognises that Malaysia’s resilience is deeply interconnected with that of its neighbours.

“The Asean taxonomy promotes harmonious standards for classifying sustainable economic activities while encouraging financial flows, consistent with orderly transitions across member states,” he said at the virtual Sustainable Finance Week Expo 2020 Dubai, which was hosted by the Securities Commission Malaysia.

Fraziali added that he is encouraged to see financial institutions in Malaysia strengthening their internal capacity to tackle climate change – from commitments to net zero carbon emissions by 2050 to the development of dedicated sustainability-related funds.

“In the bigger picture, the financial ecosystem is shifting to self-evaluate and promote greater ethical behaviours and decision-making,” he said.

Malaysia’s Islamic banking industry is supporting approximately 4,500 renewable energy and green projects worth more than US$2.2 billion, he noted.

“This signals our underrated ability to quickly respond to the needs of the global economy today and has primed us to meet the demands of tomorrow. To me, this is an assurance that there is clearly a bonafide path to elevating the potential of the Malaysian economy towards a sustainable future,” he added.