MNI BRIEF: Bank Negara Malaysia Moves on Climate Change Risks

Malaysia's central bank has joined the rank of global central bank's moving to address the issue of climate change, as it announced plans for mandatory climate-risk disclosures by local financial institutions to be introduced this year.

Speaking at a Joint Committee on Climate Change (JC3) flagship event Wednesday, Bank Negara Malaysia Governor Nor Shamsiah Yunus said the central bank was also considering implementing capital requirements and supervisory assessments for "outlier institutions" to encourage a more pro-active approach on climate. "The economy and society cannot be separated from the environment and our actions have to be cognisant of this," said Nor Shamsiah.

"While we are making progress, there remains considerable scope for the financial sector to be more deliberate in considering the impact of climate change on risks and strategy," he added.

The issue of climate change is becoming a greater thread in central bank thinking and is now central in the Bank of England's official remit. Earlier this month, the heads of the Federal Reserve, European Central Bank and the People's Bank of China shared a platform to discuss the issue.