JC3 to establish Climate Finance Innovation Lab

PETALING JAYA: The Joint Committee on Climate Change (JC3) will be establishing a Climate Finance Innovation Lab to accelerate decarbonisation efforts via innovative financial solutions.

Bank Negara and the Securities Commission Malaysia (SC), in a joint statement, said the lab is envisaged to be spearheaded by Bank Pembangunan Malaysia Bhd and will focus on bringing together industry players to ideate financial solutions for climate transition, adaptation and nature-related projects.

“This lab will also provide support to the pilot projects positioned under JC3. This, together with the Transition Finance Guidance being developed by JC3, is expected to further expand credible green financing opportunities.”

The JC3 is a platform established in September 2019 to pursue collaborative actions for building climate resilience within the Malaysian financial sector. It is co-chaired by Bank Negara Deputy Governor Datuk Jessica Chew Cheng Lian and SC executive director Salmah Bee Mohd Mydin.

Following the JC3’s 13th meeting on July 23, its members agreed to pursue two key initiatives in relation to data.

“First, to support the development of national emissions factors for key industrial sectors through closer collaboration between the government and financial sector players involved in data collection and reporting.

“Second, measures to reduce reporting burdens on companies for information furnished to financial institutions. This includes the use of standardised templates by financial institutions to obtain climate-related information from customers, and arrangements to enable companies to allow financial institutions to share their information to other financial institutions with consent.”

As part of ongoing efforts to improve climate data availability, JC3 will be publishing the third iteration of the JC3 Climate Data Catalogue in December 2024.

“The updated version will feature approximately 28 new unique data items, particularly on biodiversity and nature-related financial risk data, in addition to the existing 128 unique data items already captured in the catalogue.” Chew noted that data availability, collection and reporting are all key enablers of the green transition.

“In this regard, JC3 is committed to improving both the quantity and quality of available climate data to support risk assessments and an orderly transition.” Additionally, Bank Negara and the SC said supporting small and medium enterprises remains a priority for JC3, with ongoing plans to spread awareness to SMEs on climate risk.

“Several industry-focused environmental, social and governance awareness workshops will be conducted for SMEs to aid their transition.

“This complements efforts to promote availability of green and transition financing to SMEs which include the High Tech and Green Facility and Low Carbon Transition Facility under Bank Negara’s Fund for SMEs.”