KUALA LUMPUR — The Joint Committee on Climate Change (JC3) has agreed to fully adopt the ASEAN Taxonomy for Sustainable Finance as the basis for the Malaysia Taxonomy, marking a significant step towards greater regional interoperability, consistency and comparability in sustainable finance.
Bank Negara Malaysia (BNM) and the Securities Commission Malaysia (SC), in a joint statement, said the decision would also reduce the operational burden on businesses, particularly those involved in cross-border trade.
“JC3 will develop practical guidance and tools tailored for local implementation,” the statement said following the committee’s 17th meeting held on Aug 6.
A pilot involving selected members will be conducted before full adoption for reporting in 2028 to identify implementation challenges and inform further refinements where necessary.
BNM Assistant Governor and JC3 Co-Chair Madelena Mohamed said a taxonomy would only be effective if it could be applied consistently and confidently.
“As Malaysia adopts the ASEAN Taxonomy as the foundation of the Malaysia Taxonomy, JC3 will focus on developing practical implementation guidance and tools to support its use.
“The pilot will help identify operational challenges early and ensure the framework remains fit for purpose and relevant for Malaysia’s needs,” she said.
Meanwhile, JC3 has issued the National Sustainability Reporting Framework (NSRF) Guidance Documents for Banks and Insurers and Takaful Operators to support implementation of the NSRF.
The guidance is aimed at making sustainability-related disclosures more robust, consistent, comparable and purposeful, while addressing common implementation challenges involving risk and opportunity assessments, strategy disclosures, and the use of metrics and targets.
Hands-on capacity-building programmes will begin in October 2026 to support implementation.
SC Chief Sustainability Officer and JC3 Co-Chair Neetasha Rauf said the guidance would help financial institutions, insurers and takaful operators navigate reporting challenges and support their transition towards high-quality, decision-useful sustainability disclosures.
The JC3 also noted further progress under the Climate Finance Innovation Lab (CFIL), which connects climate- and nature-related projects with funding opportunities.
Under its second cohort, 22 projects seeking RM1.73 billion in funding will undergo a structured accelerator programme in collaboration with the United Nations Global Compact Network Malaysia, Brunei and Cambodia (UNGCMBC).
The programme will support business model refinement, impact assessment and funding facilitation, while interested funders are encouraged to engage with CFIL to help scale impactful climate- and nature-related solutions.
To support implementation of the Malaysia Taxonomy and the growth of sustainable finance, JC3 will also explore a centralised climate- and nature-related data platform.
The platform is expected to improve access to reliable data, enabling financial institutions, businesses and investors to assess risks and opportunities, meet reporting requirements and channel capital towards sustainable and transition activities.
The JC3 Journey to Zero Conference (JC3 J20), its flagship event, will be held on Sept 28 and 29 at Sasana Kijang.
The conference will bring together policymakers, financial institutions, investors and other stakeholders to advance practical solutions for scaling transition and adaptation finance, share implementation experiences and challenges, and explore solutions to deliver measurable outcomes.
The JC3 was established in September 2019 as a platform for collaborative action to build climate resilience within Malaysia’s financial sector.
It is co-chaired by Madelena and Rauf, with members comprising senior officials from Bursa Malaysia and 25 financial industry players. Its initiatives and priorities are undertaken through five sub-committees covering risk management; governance and disclosure; product and innovation; engagement and capacity building; and bridging data gaps.
