suhaimi ali : leading the change - empowering small businesses to tackle climate change opening remarks by mr suhaimi ali, assistant governor of the central bank of malaysia ( bank negara malaysia ), at the greening value chain ( gvc ) programme rollout, kuala lumpur, 7 march 2023. * * * assalamu'alaikum and a very good morning to distinguished guests. let me begin by congratulating kossan rubber industries berhad and pantas sdn. bhd. for the timely rollout of the greening value chain programme. it is no doubt that climate change is accelerating. dangerous weather events are becoming more frequent and extreme, and global co2 emissions are starting to rise as economies pick up speed post - pandemic. as we gather here today, floods caused by heavy rainfall have been reported across several states in malaysia. with the climate crisis upon us at such a pace, accelerating our actions in responding to climate risk becomes all the more urgent and necessary. ladies and gentlemen, we are on the edge of a climate precipice, close to reaching a 1. 5c tipping point, beyond which the damage to our environment would be irreversible. the increasing frequency of natural disasters also provides a grim teaser of what lies ahead if we do nothing. recognising this urgency, more than 70 countries have set net zero greenhouse gas ( ghg ) emissions targets1, and more and more businesses are also making commitments to reach net zero ghg emissions by mid - century. based on projections, climate inaction would cost the global economy usd 178 trillion over the next 50 years2. it is evident that businesses must transition to be sustainable to keep pace with the global race towards net zero. as an exporting nation, malaysia must also prepare for tightening of climate - related regulations that may be imposed by our trading partners. small and medium enterprises ( smes ) that form 37. 4 % of malaysia's economy3 are the most susceptible. according to report findings by the sustainable finance institute asia 2022, smes stand to lose rm292 billion in revenue due to non - esg compliance4. the silver lining behind these adversities is the immense growth opportunities. studies have shown that sustainability investments reward businesses through higher premiums 5, better brand value, and lower operating expenses6. without the necessary support, the ambition to achieve net zero would be a tall order for smes, which

the technical issues that central banks are working on. it has to be endorsed, among others, by policymakers. they have to make key decisions. a proper legal basis for issuing a digital euro is currently under preparation, with the european union working on an agreement on this crucial topic. 4 future challenges of course, there are obstacles to be overcome before a digital central bank currency can be introduced. let me mention just the most prominent one. the digital euro will be a riskless asset issued by the central bank. therefore, its availability could create incentives for enterprises and households to shift deposits out of the banking sector into digital euros. if bank customers gradually transfer large volumes of their deposits into digital euros, this could have an adverse overall effect on the supply of credit and thus on the real economy. in times of financial turbulence or heightened uncertainty, we 2 / 3 bis - central bankers'speeches might see abrupt and substantial outflows of money from the banking sector, which would also endanger financial stability. to avoid that, there are plans to set a holding limit for the digital euro. the eurosystem will not take over the role of banks. we are planning to issue a digital euro, but not to distribute it. banks will continue to maintain important relationships with their customers. and the digital euro will be a platform for banks to provide additional services. 5 concluding remarks ladies and gentlemen, let me conclude. after launching the preparation phase, we still have a long way to go before we decide whether to issue the digital euro. if we decide in its favour, i would expect it to take four to five years'time until we have introduced a digital euro. if robert c. merton is to be believed, we should not hurry the process. he wrote : " separate and discrete innovations in products and services can be implemented in an entrepreneurial way and rather quickly. innovations in financial infrastructure, however, must be more coordinated ; they therefore take longer to implement and will occur more gradually. " 3 in my view, this statement may well hold for payment infrastructures as well. today, many people still have only a very vague understanding of the goals and framework of the digital euro project. therefore, we have a lot of work ahead of us convincing the public and gaining its trust. i am firmly convinced that the digital euro will be a success. 1 ecb, study on the payment attitudes of consumers in the euro area ( space ), december 2022 2 ecb, a stocktake