Bank Negara Malaysia (BNM), the World Bank Group and the United Nations Development Program Biodiversity Finance Initiative (UNDP BIOFIN) have on Thursday released a report entitled ‘A LEAP for Nature: Advancing Nature-related Financial Risk and Opportunity Assessment in Malaysia.’
BNM said in a statement that the report examines the extent to which financial sector activities depend on, and impact nature.
As nature loss poses risks to the financial system, the report also explores how financial institutions and firms are assessing nature-related risks and opportunities.
The report also sets out recommendations for financial institutions, firms and public sector entities to strengthen the ecosystem for assessing nature-related risks.
It provides practical guidance to help financial institutions and firms identify and assess their dependencies, impacts, risks and opportunities related to nature.
Collectively, these efforts will enhance the resilience of Malaysia’s financial system and support the transition towards a more sustainable and nature-positive economy.
“There is growing urgency to consider nature more systematically in decision-making processes – across strategy, risk management, and capital allocation,
“As highlighted in the report, financial institutions and firms can start by building a better understanding of three areas: their dependence on nature, their impact on nature, and the risks and opportunities linked to both,” BNM Assistant Governor Madelena Mohamed said.
While financial institutions have traditionally focused on risk, she said during her speech at the launch of the report that the transition to a nature-positive economy also presents significant opportunities.
In Asia-Pacific alone, such opportunities could generate up to $4.3 trillion in annual value and create 232 million jobs by 2030.
Examples include sustainable agriculture that improves yields and reduces input costs, eco-tourism as a driver of green growth, and nature-based solutions such as mangrove restoration that reduce infrastructure and insurance costs while improving climate resilience.
According to her, Malaysia, as one of the world’s 17 megadiverse countries, is particularly exposed—and advantaged. Its forests, rivers and oceans function as natural capital that supports agriculture, industry, water security and livelihoods.
However, she highlighted that the same dependence creates growing vulnerabilities. Deforestation, overfishing, urban expansion and ecosystem degradation are already translating into financial risks, including supply disruptions, flood-related losses and declining resource stocks.
She warned that nature-related risks are also becoming financial risks, affecting credit quality, asset values, insurance claims and reputational exposure. At the same time, policy tightening and shifting market expectations are increasing transition risks for businesses.
She said financial institutions must improve how they assess their dependence on, and impact on, nature, and integrate these insights into strategy, risk management and capital allocation.
Meanwhile, World Bank Group Country Manager for Malaysia Judith Green said nature underpins economic activity and financial stability, yet its value is often overlooked in decision-making.
“As Malaysia advances its sustainability agenda, understanding how businesses depend on, and the impact of, nature is becoming increasingly important,
“This report provides a practical framework to help institutions identify, assess and manage nature-related risks and opportunities – ultimately supporting the transition toward a more resilient economy and higher quality jobs,” she added.
UNDP Malaysia, Singapore and Brunei Deputy Resident Representative Besian Xhezo said nature is one of Malaysia’s most valuable economic assets.
“It supports livelihoods, strengthens food and water security, sustains businesses and supply chains, and underpins long-term resilience. As Malaysia advances its sustainability ambitions, understanding nature-related risks and opportunities is becoming essential for sound business and financial decision-making,
“This report provides a practical starting point for companies and financial institutions to turn awareness into action and help build a more resilient, competitive, and nature-positive economy,” he added.
Malaysia’s digital payments rise as 8.44 billion transactions processed in 2025