Bank Negara Malaysia (BNM) and the World Bank have announced two key initiatives to enable the financial sector to support nature-positive outcomes.

BNM said in a statement on Sunday that the two initiatives are financial risks assessment guide for Malaysian financial institutions and businesses to assess nature-related risks and impacts; as well as private capital mobilization for nature-based solutions.

According to the statement, the risk assessment guide will be developed in consultation with the Taskforce on Nature-related Financial Disclosures (TNFD) Secretariat.

The aim is to support Malaysian financial institutions and businesses in identifying and assessing an organization’s nature-related dependencies, impacts, risks and opportunities.

The guide will be based on the integrated approach that TNFD has developed for the identification and assessment of nature-related issues, called the LEAP approach (Locate, Evaluate, Assess, Prepare), an integrated process developed by TNFD to help organizations identify and assess nature-related impacts, dependencies, risks, and opportunities, even without formal disclosure

This consultation will follow BNM becoming a member of the TNFD Forum, a global multidisciplinary consultative group that is aligned with TNFD’s mission and principles.

BNM and the World Bank will facilitate the development of innovative financial instruments to support private investments in nature.

This includes enabling regulations to support nature-positive outcomes and piloting new financial structures.

According to the statement, these initiatives will facilitate the integration of nature-related considerations into decision-making while supporting financial flows towards nature-based solutions.

Bank Negara Malaysia Governor Datuk Abdul Rasheed Ghaffour said the partnership announced is in recognition of the implications of nature-related risks to a megadiverse country like Malaysia.

He said the collaboration sealed will bring about greater alignment between financial flows and positive outcomes.

The World Bank Country Director for Brunei, Malaysia, Philippines and Thailand Ndiame Diop said that with this collaboration, Malaysia aims to develop robust measures to increase finance for the natural world, thereby setting a good example for other nations grappling with nature-related financial and economic risks.

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