MOF confident financial sector will contribute to nation's sustainability journey

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said financial institutions must work together to ensure that funds for sustainable development are available.

"Financial institutions should embrace the sustainability agenda and deliver their commitments, whether through financing or through their operations and corporate social responsibility initiatives, such as prioritising vendors and partners who also commit to the sustainability agenda.

"Financial institutions must also assist the government in mainstreaming the sustainability agenda across as many sectors and industries as soon as possible," said Tengku Zafrul in his keynote address at the MARC 360: Sustainable Development Financing 2022 conference.

His speech was read by MoF's secretary-general, Datuk Seri Asri Hamidon today.

In his speech, the minister highlighted that the MoF has already begun budget-tagging specific measures to ensure that various ministries spend in accordance with Malaysia's sustainability expectations.

To maintain the mainstreaming process' momentum, Tengku Zafrul said financial institutions must share key data on how each industry has 'shaped up' in terms of sustainability so that future policies can be tweaked accordingly to improve climate adaptation and crisis mitigation strategies as quickly as possible.

Other than that, they must also assist the government in enabling and improving the adaptive capacity of households and businesses, he said.

"Apart from providing incentives, we must also remove barriers, such as lack of information and financing, as well as behavioural biases and imperfect markets -- we can support the right innovation and technologies to mitigate climate and other risks if we work together to make this information available.

"We want to ensure that financing is available for environmental or social solutions that may have high upfront costs by enabling start-ups through platforms like Penjana Kapital," said Tengku Zafrul.

He said the MoF will continue to provide direct assistance to those who cannot afford to invest in adaptation initiatives.

"Malaysia must do everything possible to promote sustainable development, and the lowest hanging fruit is the financial sector, the lifeblood of our economy," he added.