Kuala Lumpur: Bank Negara Malaysia and the World Bank published on Tuesday a report entitled "An Exploration of Nature-related Financial Risks in Malaysia".
This exploratory study, jointly undertaken by Bank Negara Malaysia and the World Bank, uses local and global data to examine the relationship between the Malaysian financial sector and nature.
It also assesses potential exposures to nature-related risks through banks’ financing activities.
"Ecosystem and planetary health matters to economic and financial stability. While the primary responsibility for addressing these priorities rests with the government, the financial industry and authorities have a critical interest in deepening our understanding and appreciation of the interactions between climate and nature-related risks – because how these risks evolve, both affect and are affected by, the actions of financial institutions," Bank Negara Malaysia Governor Tan Sri Nor Shamsiah said in a press release on Tuesday.
The report provides a launch pad for further study on nature-related risks and highlights the importance of tackling nature loss and climate change in a coherent manner.
It also recognises the opportunity to leverage on the progress made on climate initiatives to address broader nature-related risks.
"By identifying and quantifying nature-related financial risks, authorities will be better positioned to prioritize initiatives within their scope of mandate in managing this concern," said Ndiame Diop, World Bank Country Director for Brunei, Malaysia, Philippines and Thailand.
"We are happy to have partnered with Bank Negara Malaysia to support their leadership on this issue. This report is the first of its kind published by a central bank in Asia. We hope that it will provide an example for other countries facing similar challenges," added Ndiame.
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