Bursa Malaysia Berhad and the Malaysia Forest Fund (MFF) have formalized a memorandum of collaboration (MoC) to advance carbon market development and foster synergies in environmental, social and governance (ESG) efforts.

The duo said in a statement on last Wednesday MFF leads the development and implementation of the REDD Plus Finance Framework (RFF), which comprises two instruments — the Forest Conservation Certificate (FCC) and the Forest Carbon Offset (FCO).

The MoC aims to explore synergies between MFF’s programs and Bursa Malaysia’s efforts to support decarbonization among companies through avenues such as Bursa Carbon
Exchange (BCX), a wholly owned subsidiary of Bursa Malaysia.

The scope of the two-year collaboration will cover exploration of the areas including potential inclusion of FCC support into ESG-themed indices, to promote forest
conservation efforts by listed entities.

It will also cover the areas of promoting awareness of the national carbon crediting program once it is established; identification of opportunities for FCO units to be traded by both domestic and international participants through BCX, to enhance carbon trading liquidity.

It will also stablish potential pathways for synergy in carbon market infrastructure development such as registries and tracking systems, in alignment with national policies and regulatory frameworks.

“This collaboration reflects our shared commitment to advancing forest conservation and restoration efforts through both market-based and non-market mechanisms,

“We particularly look forward to the introduction of Malaysia’s national carbon crediting system, which will enable BCX to expand its offering to include both national and international labelled carbon credits, thus broadening access and accelerating impact,” said Fad’l Mohamed, Chief Executive Officer of Bursa Malaysia.

Suhaini Haron, Senior Director of Corporate Development and Strategy of MFF, also expressed her confidence in Bursa Malaysia regarding this strategic collaboration.

“The introduction of the FCO next year is a significant stepping stone signalling the beginning of Malaysia’s vision to become a low-carbon nation,

“It is not only a reflection of Malaysia’s commitment to saving our forests but also an indication of our willingness to play a useful role in the world’s carbon economy,” she said.

According to her, having FCO traded on BCX would highlight Malaysia’s leadership in developing credible, transparent, and nationally accepted carbon instruments.

“This action will create room for additional private sector initiatives to support global action on climate, while keeping the value of our natural forests intact for future generation,” she added.

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