Key Message 2 - Rethinking risk The second imperative calls for a re-thinking of risk by Islamic financial institutions. Nontraditional forms of risks such as social, political and environmental risks are business threats that simply cannot be ignored. Research indicates that there are material benefits to managing these risks more proactively. An IFC survey of global banks showed that around 86% of respondents which integrated social and environmental risks in their business have yielded positive business results. There are also growing calls by shareholders for financial institutions to play a more proactive role in the sustainability agenda. I am among those who believe that the true mark of a sustainable financial system ultimately lies in the extent to which, the market’s and management’s view of risks reflect sustainability factors. In June 2017, the Financial Stability Board published recommendations, for helping businesses disclose climate-related financial information. In the context of “finance beyond profit”, this was a significant development by a global standard setting body, and the broader G20 community, to encourage the provision of better information on climate-related risks and their financial impact. For many, this is both a reflection of, and catalyst for, the closer examination of risk- and impactadjusted returns, by capital and funding providers. As natural stewards of sustainable finance models, Islamic financial institutions are well placed 2/4  BIS central bankers' speeches  to develop richer perspectives of social and environmental risks. This calls for a review of internal risk decision-making processes and inputs within financial institutions, alongside enhanced disclosures to market participants.

Nor Shamsiah Mohd Yunus: Value based intermediation - beyond profit Keynote address by Ms Nor Shamsiah Mohd Yunus, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Global Islamic Finance Forum 2018 (GIFF) "Value Based Intermediation - Beyond Profit", Kuala Lumpur, 3 October 2018. * * * Henry Ford, credited with revolutionising the American transportation industry in the 20th century, once remarked that “Business must be run at a profit, else it will die. But when anyone attempts to run a business solely for profit and thinks not at all of the service to the community, then also the business must die, for it no longer has a reason for existence”. Nearly a hundred years since, these words of wisdom remain true. Perhaps, even more so now than ever. Indeed, we have witnessed time and again, episodes of excessiveness, and the sole and unchecked pursuit of profits, that have led to global financial crises. The theme of this conference, “Value Based Intermediation – Beyond Profit”, is therefore a fitting reminder of the role of finance, and Islamic finance in particular, in helping build a more resilient and sustainable future. In the past half century, the world economy expanded sixfold, despite experiencing the worst and most expensive financial crisis. Average per capita income more than doubled to about USD11,000, compared to only about USD5,000 in 1967. People are living longer, with better quality of life, greater access to basic necessities, improved health and medical care, and better education.