abdul rasheed ghaffour : welcoming remarks - jc3 journey to zero conference 2023 welcoming remarks by mr abdul rasheed ghaffour, governor of the central bank of malaysia ( bank negara malaysia ), at the jc3 journey to zero conference 2023, kuala lumpur, 23 october 2023. * * * let me extend a very warm welcome and selamat datang to all present this morning at sasana kijang and for those joining us virtually at this conference. though only two years have passed since the last conference, the world has witnessed a series of unprecedented climate events. we saw record - breaking global temperatures with july marked as the hottest month ever. the united nations has even declared the start of the era of global boiling – with a 98 percent chance that the world will experience a new temperature record at least once in the next five years1. today's event is about the climate. but allow me to start by saying a few words about the economy. the world we occupy is indeed challenging – decisions and events miles away can affect our shores, leading to external shocks facing our economy today. despite this, the malaysian economy is resilient and growth remains forthcoming. advance estimates show the economy growing by 3. 3 percent in the third quarter, compared to 2. 9 percent last quarter. while we are currently experiencing weakness in global demand and the tech downcycle, domestic demand is holding up well. more recent indicators are already showing signs of recovery. looking ahead, we expect the global economy to improve. the initiatives to strengthen malaysia's economic structure, including transitioning towards a greener economy, will certainly provide additional impetus to business activities and employment opportunities. as a highly open economy, the exchange rate is a very important relative price affecting many aspects of the economy. with growth gaining momentum, steady disinflation, a current account surplus and a strong banking system, current ringgit movements appear to be more heavily influenced by global events and certainly do not reflect our economic fundamentals. i want to emphasise strongly that malaysia's economy today is resilient notably in terms of our economic fundamentals, robustness of our financial sector, and depth of our financial markets. let me also stress that the bank remains committed to deploy necessary measures to ensure that the ringgit adjusts in an orderly manner and businesses continue to be facilitated. we have been in the markets, and we will, when needed, continue to be in the market.

green and greening products and solutions, as well as an increasing amount of financing committed by industry players. today, the'wall of commitment'showcases the industry's financial commitment of more than rm200 billion for environment, social and governance ( esg ) purposes. while the amount is commendable, more is needed to fund the transition, not only from banks, but also capital market players. it is equally crucial for financial institutions to follow through on the integrity of these pledges by aligning commitments with actions and investments that are consistent with a just and orderly transition. the bank remains focused on ensuring that the financial sector's response to the climate challenge is compatible with both financial stability and inclusion outcomes - to forge a credible path forward for the country. we are mindful that this requires maintaining a delicate balance between development and risk management. by 2026, we expect to see at least half of new financing by banks to be aligned with climate supporting or transitioning activities, as set in the financial sector blueprint. the bank will continue to provide a facilitative policy environment for the industry to advance financial innovations and explore novel financial structures needed to meet the significant financing needs for climate risk mitigation and adaptation. this will need to include a more prominent role for public - private partnerships and innovative blended finance structures. the bank has begun undertaking a comprehensive review of our regulations to ensure climate risk is appropriately accounted for and well - integrated into our regulatory framework. this is to ensure that the industry remains climate resilient, while being able to effectively support the economy's transition. we recognise the challenges that financial institutions may face in balancing these outcomes. concentration risks could for example, increase from green and transition funding, and financial institutions need to properly understand and manage such risks. for the bank, any adjustments to prudential standards would need to carefully consider necessary safeguards to ensure the attendant risks continue to be adequately managed. as financial institutions take more concrete steps in climate action, managing the tradeoffs inherent in crafting credible transition plans and allocating capital that aligns with a 3 / 5 bis - central bankers'speeches net - zero trajectory will be all - important. in support of this, the bank is working to develop guidance on transition plans to promote alignment between financial institutions'business and risk strategies, their public commitments on climate goals and national plans, while safeguarding against the risk of greenwashing. financial institutions must also consider the specific needs of their clients in their