KUALA LUMPUR, April 5 — Bank Negara Malaysia (BNM) is collaborating with the financial industry to issue the second cohort of Value-based Intermediation Financing and Investment Impact Assessment Framework (VBIAF) sectoral guides on oil and gas (O&G), manufacturing, and construction and infrastructure by the end of this year.
The first cohort of the VBIAF sectoral guides on palm oil, renewable energy, and energy efficiency was issued on March 21, 2021.
The VBIAF sectoral guides are part of a sectoral and activity impact-based risk management toolkit, the central bank said in its Annual Report 2020 released recently.
“In the coming year, our focus will be on creating strong familiarity and traction for the industry-wide adoption of the Climate Change and Principle-based Taxonomy and the VBIAF. This will facilitate better understanding and measurement of climate and environmental impact from economic activities.”
Going forward, BNM said the significant focus is given to putting in place the necessary building blocks for financial institutions to strengthen climate risk management practices while supporting transitioning efforts by economic agents.
“Within the next three years, we aim to fully integrate climate-related risk considerations in our supervisory assessments and achieve material progress to reflect climate risk in our prudential framework and macroeconomic and financial stability assessments.”
As for the Climate Change and Principle-based Taxonomy (CCPT), it said the final document is expected to be released soon after feedback from the public consultation process.