KUALA LUMPUR (BERNAMA) – Bank Negara Malaysia recently issued the climate change and principle-based taxonomy (CCPT) guidance document as part of its commitment to prepare the financial sector to be more climate resilience and enable an orderly transition to a greener economy.
In a statement yesterday, the central bank said the CCPT guidance document was to address the urgency to accelerate the transition, given the increasing likelihood and intensity of climate change impacts on financial stability. “Financial sector plays a critical role in supporting the transition by channelling capital and funds towards activities that support climate and environmental objectives through their green financing, investment and advisory activities.
“The CCPT provides a framework that facilitate robust and consistent assessments of economic activities and their associated impacts on climate mitigation, adaptation, and the transition to low carbon and/or more sustainable practices,” it said.
Bank Negara said the assessment incorporated considerations of broader environmental outcomes, particularly on how business operations affect pollution, biodiversity and resource efficiency.
The central bank said in supporting an orderly transition, the CCPT recognised remediation measures and establishes a progressive system of transition categories, namely climate supporting, transitioning and watchlist to acknowledge concrete efforts and commitments by businesses to adopt sustainable practices.
The CCPT was first published in December 2019 as a discussion paper for public consultation.