Global References

The ASEAN Transition Finance Guidance (ATFG) provides a framework to assess companies’ forward-looking plans and facilitate investor support for a sustainable transition. The ATFG aims to accelerate the efforts of financial institutions to direct finance to transitioning companies and create incentives for real economy companies to create more ambitious and credible transition plans, through differentiating what commands a greater demand premium from investors.

The ASEAN Taxonomy for Sustainable Finance serves as a comprehensive guide for identifying and classifying sustainable finance activities in the region. Released in March 2023 (with an update in June 2023), Version 2 introduces Technical Screening Criteria (TSC) for the Energy sector. It considers widely used taxonomies and frameworks to ensure interoperability while meeting ASEAN’s specific needs. The taxonomy employs a multi-tiered approach, featuring a Foundation Framework for qualitative assessments and a Plus Standard with metrics for quantitative assessments in Focus Sectors.

Climate Bonds provides targeted bespoke guidance on developing credible transition plans and on how to leverage on the right sustainable debt instrument for your organisations needs. Feel free to reach out to the Climate Bonds Initiative (CBI) for a discussion.

The Transition Plan Taskforce (TPT) was launched in 2022 to establish the gold standard for transition plans. Since inception the TPT has delivered, among others, the TPT Disclosure Framework, Draft Sector Guidance for Asset Owners, Asset Managers, Banks, Food & Beverage, Electric Utilities & Power Generators, Metals & Mining, and Oil & Gas and Guidance on the Transition Planning Cycle and guidance to help preparers Explore the Disclosure Recommendations. This progress has been accompanied by international engagement that is informing approaches and new regulatory requirements in a number of jurisdictions, and through multilateral processes. This includes with the Financial Stability Board, IOSCO and the NGFS, as well as the G7, G20, UNFCCC and the Coalition of Finance Ministers for Climate Action.

Initiatives to support Transition in Malaysia

Capital Markets Malaysia, an affiliate of the Securities Commission Malaysia, works to support the advancement of Malaysia’s capital market intermediaries through various initiatives and partnerships. Through its three centres of excellence, the Malaysian Sustainable Finance Initiative, the Sustainable Investment Platform and the Centre for Sustainable Corporations, CMM supports capacity building and market development for Malaysia’s financial sector, investors and business enterprises.

The Hydrogen Roadmap is intended to be a supporting document to the National Energy Policy 2022-20242, which envisages the development of a hydrogen economy in Malaysia. This is encapsulated in the National Energy Transition Roadmap in which hydrogen was identified as one of the six energy transition levers that will drive the country’s efforts to be a net-zero nation by 2050.

The National Energy Transition Roadmap (NETR) is crucial for Malaysia’s journey towards a brighter, cleaner, and more resilient future. Aligned with the Ekonomi MADANI framework, it reflects Malaysia’s commitment to sustainability which sets the stage for Malaysia’s transformative journey amid global energy challenges. It emphasizes reducing carbon footprint, creating new growth opportunities, and fostering knowledge workers. More than a policy, the NETR is a moral imperative, signalling our commitment to future generations and the sustainability of communities, industries, and the environment.

The Principles-based SRI Taxonomy aids the Malaysian capital market in identifying activities aligned with environmental, social, and sustainability goals. It provides voluntary guidance to stakeholders, fostering clarity in classifying activities for sustainable investments. The taxonomy aims to standardize and compare assets, contributing to the growth of this asset class at different levels. It aligns with national climate and sustainability objectives, complementing existing laws and policies for greater sustainability practices in corporate Malaysia.

The scheme covers 90% of costs, up to RM300,000, for independent expert reviews of sustainable sukuk issuances. Recipients also benefit from tax incentives over 5 years until YA 2025. The objective is to incentivise eligible issuers by offsetting external review costs for sukuk issuance under the Securities Commission’s Sustainable and Responsible Investment (SRI) Sukuk Framework, ASEAN Green Bond Standards, and SRI Linked Sukuk. The Grant aims to facilitate the transition of companies to adopt low-carbon practices and enhance sustainability through sukuk issuances.

The Transition Strategy Toolkit developed by Capital Markets Malaysia and Climate Bonds Initiative (CBI) is designed to guide ASEAN corporates on the underlying principles and elements to be incorporated when developing climate transition plans. At its core, the Toolkit serves as a guidance to corporates in developing a credible transition strategy, which underscores science-based and widely accepted transition principles, with the aim of supporting corporates seeking to attract private capital for their transition finance needs. This toolkit guides users through the Climate Bonds Initiative’s 5 Principles for an ambitious Transition. These Principles lay the groundwork for a credible Transition label to enable investors to easily identify investments that support a low-carbon transition.