Protection products, such as green housing insurance, also remains an unexplored market in Malaysia despite the steadily increasing number of green buildings in the country. Within existing product offerings, novel features such as additional protection for non-certified green buildings to rebuild in green when damage occurs, could also be explored. Responding to the need for green housing calls on financial institutions to take an approach that is at once novel but not entirely unfamiliar. The journey towards greater incorporation of sustainability considerations is one which many institutions have embarked on, and a focus on green housing is both highly strategic and impactful to the broader agenda of greening the economy. It does, however, bring with it some specific challenges. Housing affordability in Malaysia is already presenting a significant challenge to home ownership with house prices remaining beyond the reach of many Malaysians. This is further compounded by current high levels of household debt. The goal for institutions is to develop green housing solutions that would not substantially worsen these conditions and help steer the market towards a just and orderly transition. Rising to this challenge will require creativity and collaboration between public and private institutions. I am encouraged to see the broad range of participants assembled at this event, including social housing enterprises, government bodies, and non-profit organisations which along with the private sector, have the wherewithal to open up opportunities for the development of new business and funding models for green housing.

On its part, the Bank will continue to support transition activities through the RM1 billion Low Carbon Transition Facility and other funds for SMEs which will complement funds extended by financial institutions to help SMEs implement sustainable low carbon practices. By 2024, we have also required all FIs to make disclosures in line with the recommendations of the Task Force on Climate-related Disclosures (TCFD). Given that such disclosures by FIs will ultimately depend on disclosures provided by their customers and counterparties, this will have implications on demands for climate-related information from businesses. Significant efforts are also being pursued to support climate risk management and transition through the Joint Committee on Climate Change, or JC3, which is co-chaired by the Bank and the Securities Commission. The JC3 serves as an industry-regulator collaborative platform to drive and coordinate the financial sector’s response to climate change. As part of efforts to scale up transition finance, JC3 is actively exploring pilot programmes to test new green solutions and instruments. In identifying suitable pilot projects, priority will be given to climate-friendly projects that can help develop the broader ecosystem for green finance, such as carbon accounting and measurement frameworks, climate data aggregators, or green credentialing standards. Another key deliverable of JC3 this year is the upcoming publication of a data catalogue that will point users to credible sources of critical climate data needed to support identified use cases.