‘Malaysia leads in green finance, but gaps remain’
Climate Governance Malaysia (CGM) council chairman says green finance ecosystem must be underpinned by robust governance
KUALA LUMPUR, Malaysia (MNTV) – Malaysia is emerging as a leader in green finance, boasting robust governance and transparent disclosure frameworks that have earned international recognition but gaps remain in its financial policy and regulatory environment, says Climate Governance Malaysia (CGM) council chairman Dr. Gary Theseira in an interview with The Star.
A healthy and vibrant green finance ecosystem must necessarily be underpinned by robust governance and transparent disclosure frameworks, he says.
With the announcement that Sabah state has adopted state-level climate legislation (Sarawak passed climate legislation in 2023), Peninsular Malaysia remains the only territory without climate legislation.
Only a legal framework of emissions allowances (caps)—with incentives for deep cuts and consequences for excessive emissions, such as a carbon tax or a carbon exchange—will gradually but effectively drive national emissions toward net zero, says Theseira.
“We understand that such a climate change act is under development and will be tabled in Parliament in the not-too-distant future. Also needed is the sectoral and industry-specific data for benchmarking and threshold setting,” says Theseira.
“Exposure and vulnerability to climate hazards should be areas of primary concern, as should risks associated with transition, including carbon border adjustments and regulations or legislation governing imports. Water consumption by industries and liquid effluents and waste are an often-overlooked factor, but this vital information is a mainstay of environmental impact reporting.”
Asked how SMEs fit in the green finance ecosystem, he says Malaysian SMEs are moving very rapidly up the learning curve.
“Small businesses ranging from palm oil smallholders in Johor to seaweed farmers in Tawau are already using e-payment systems.”
“They are the first link in a data chain that runs from them to the public-listed companies (PLCs) and multinational corporations (MNCs) they supply.
“PLCs and MNCs are reaching out to the SMEs in their supply chains, offering training and capacity building.”
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