Increasingly, we see more of Malaysia’s industries and companies face scrutiny and challenges in their international business due to unsustainable and questionable practices. As an example, let’s consider the palm oil industry. This has been one of the largest industries that has contributed immensely to the country’s economy for quite some time. Yet, it’s an industry that needs to overcome real and perceived unsustainable practices and reduce its impact on the environment. If left unaddressed, this could threaten the long-term viability of this sector, and threaten domestic employment and industry. Palm oil players need to transform many aspects of their operations to achieve sustainability, and DFIs can play a catalytic role in this transformation. Firstly, DFIs can prioritise financing agritech to enhance the climate resilience of the palm oil industry, promote trust in terms of product origin and upscale the value chain of palm oil. Some examples of these technologies are; blockchain application which can improve traceability of palm oil inputs and contributing towards better acceptance of palm oil produce from Malaysia; precision farming which benefits the environment through more targeted use of inputs that can reduce wastages from excess applications; as well as financing new growth areas that Malaysia is developing competitive advantages in, such as biodiesel and green oleochemicals. Secondly, DFIs can consider providing sustainability-linked loans to encourage smallholders to work towards adopting relevant sustainability certifications such as RSPO and MSPO.

DFIs should look for like-minded partners across the public and private sector to collectively advance the national goals of achieving sustainable development. We see industry collaboration and collective action as a critical component of achieving higher, wider and more impactful societal and economic goals. This is evident through the work done under VBI where several DFIs are part of the community of practitioners or COP. The COP pools resources and expertise, enabling members to accelerate learning as well as drive several common initiatives together such as the issuance of VBI sectoral guidelines. Another important driver for sustainable finance is the need for it to be institutionalised and embraced throughout the organisation, with clear leadership or a tone from the top. This will ensure that a clear message resonates throughout the organisation of the commitment and intent that can then drive organisational initiatives, supported by the necessary infrastructure and systems to create change. With that, I wish you all a productive webinar and all the best in this important journey. 1 www.adb.org/news/covid-19-economic-impact-could-reach-8-8-trillion-globally-new-adb-report 2 4/5  BIS central bankers' speeches  2 www.worldbank.org/en/news/press-release/2020/10/07/covid-19-to-add-as-many-as-150-million-extreme-poor-  by-2021 3 news.un.org/en/story/2021/06/1093182 4 www.mckinsey.com/featured-insights/future-of-work/covid-19-and-gender-equality-countering-the-regressive-  effects 5 public.wmo.int/en/media/press-release/climate-change-indicators-and-impacts-worsened-2020 6 aibim.com/contents/upload/VBIAF_Sectoral_Guide_Palm_Oil_Public_Consultation.pdf  5/5  BIS central bankers' speeches