are explicitly aligned to a firm ’ s risk appetite. it is striking that, in the last five years, global standard setting bodies such as the basel committee on banking supervision have moved to address risk culture, risk appetite setting and risk governance more explicitly in regulatory standards. this was not the case prior to the crisis, when emphasis was predominantly placed on risk management processes and systems, believing that this ought to be sufficient. organisations largely failed to take into account behavioural biases that play such an important role in senior management decisions which ultimately affect the risks that a company will be willing to take or tolerate. these decisions include how performance targets are set for staff, how incentive structures are designed, and the stature and resources that are provided to risk management functions within the organisation – all of which can create a constant uphill struggle for risk managers to have any meaningful impact on risk outcomes. to illustrate the point, a report published by bis central bankers ’ speeches the office of financial research in the united states observed that much of the advancements in risk management over the last decade have resulted in a highly analyticalfocused discipline, while largely ignoring the fundamental drivers of risk - taking that are rooted in more subtle behavioural characteristics. within the financial industry, financial institutions in malaysia are required to establish a wellresourced independent risk management function that reports directly to a board risk committee, and take active measures to promote a prudent risk culture in the organisation. this includes properly designed incentive structures that must reflect risk outcomes. financial institutions are also required to regularly review their risk management methodologies and processes to account for the changing business environment. this aims to ensure that risk management does not become something one does to check off a box on a list and then forgets about. a second notable observation has been the broader focus of risk management. while financial risks remain a key focus of risk management practices, risks from reputational, human capital and environmental concerns can have equally significant repercussions for a firm ’ s business. recovering from reputational damage is a hugely expensive endeavour, takes a long time, and success is often not assured. we have observed in our own work that where institutions take a broader view of risk management in these areas, conversations around the role of risk management at the senior management and board levels are more likely to shift beyond avoiding losses, to enhancing strategic opportunities for improving the institution ’ s competitive position. this itself can have a mutually reinforcing effect of directing more resources towards risk management and

sector, i would like to highlight two points that might reduce the information asymmetry between financial institutions and businesses, a pre - requisite for building a sustainable financing ecosystem for this sector. firstly, financial institutions must have the capacity and capabilities, to assess the viability of projects despite the complex, diverse and rapidly - changing nature of green technology. secondly, green businesses need continuing advisory support as they may be technically strong, but lack the capabilities to develop comprehensive business plans and cash flow projections, needed to demonstrate that a project is viable to financiers. taking into considerations the two points i earlier raised, bank negara malaysia has worked closely with the ministry of finance and the ministry of energy, green technology and water to establish the green technology financing scheme ( gtfs ), a framework designed to improve the preconditions for financial institutions to finance viable and innovative green technology companies. this is achieved through arrangements that help to bridge information gaps between financiers and businesses. these arrangements also involves credit enhancements and financial incentives, to address current market short comings in meeting a legitimate economic need. also critically important are efforts being pursued to strengthen the capacity of financial institutions, to provide continuing advisory support to businesses that are mutually beneficial to both business ventures and financial institutions. central to this effort is the certification process to verify that businesses which qualify for the gtfs are not only able to demonstrate the required technical capabilities, but are also commercially viable. other complementary efforts include education and awareness programmes, organised around the country to inform and update, financial professionals as well as businesses on the latest developments in the green technology sector. likewise, courses offered by ibbm are designed to equip finance professionals to effectively assess the viability and risk of green technology projects. in 2010, a joint action committee comprising of government agencies and financial institutions was formed to provide an efficient and coordinated platform to tackle implementation issues, such as, on the compliance and monitoring processes of green projects financed under the gtfs. bis central bankers ’ speeches as a result of these holistic efforts, green technology financing is beginning to gain traction amongst financial institutions. to date, the gtfs has supported rm805. 5 million in financing to 65 companies, operating in a broad range of green technology sub - sectors which encompasses energy, buildings, transportation and water and waste management, reflecting a year - on - year growth rate of 130 % in terms of total financing and 171 % in terms of companies assisted. while still small in