BIMB Securities said Tuesday that artificial intelligence (AI) is transforming climate-risk management across industries, and key sector beneficiaries included utilities and energy; banks and insurers; plantations and agriculture; infrastructure and property.
The research house said in a note that climate-related losses are rising globally, regulatory requirements and investor expectations are becoming increasingly stringent, companies face growing exposure to floods, droughts and transition risks, AI is emerging as a critical tool to improve resilience, protect asset values and support sustainable growth.
Beyond its technological appeal, it said AI is increasingly emerging as an investable climate-resilience theme.
Rising climate-related losses, expanding sustainability- reporting requirements, and growing investments in digital infrastructure are creating structural demand for AI-driven climate analytics, it added.
In Malaysia, it highlighted the convergence of the Thirteenth Malaysia Plan (RMK-13), the National Energy Transition Roadmap (NETR), and the rapid development of data-center infrastructure creates a favorable ecosystem for AI adoption across utilities, infrastructure, financial services, agriculture, and manufacturing sectors.
“As climate risks become increasingly material to corporate earnings and asset valuations, AI is expected to evolve from a productivity-enhancement tool into a strategic risk-management capability,” it said.
According to BIMB, global natural catastrophe losses exceeded $250 billion in 2023, while climate change is expected to increase economic and financial vulnerabilities over the coming decades.
Investors are increasingly integrating AI-driven climate analytics into portfolio risk management, stewardship and investment decision-making.
Leading institutions such as BlackRock, Wellington Management and Schroders
already utilize AI to assess climate exposure, evaluate transition pathways and improve portfolio resilience.
According to BIMB, the experience of global investors highlights three key lessons: climate risks must be integrated into mainstream investment analysis; data-driven climate models improve decision-making; investors can enhance stewardship through better climate disclosures and scenario analysis.
These case studies suggest three implications for Malaysia. First, AI is embedded in mainstream portfolio risk management. Second, finance-science partnerships are critical for credible models. Third, investors can strengthen stewardship by demanding decision-useful climate disclosures.
“For Malaysia’s institutional investors, replicating these models through local-global collaborations is essential for scaling AI-enabled climate investing,” said the research house.
For BIMB, Malaysia remains highly exposed to floods, droughts and extreme weather events.
The December 2021 floods caused approximately MYR 6.1 billion ($1.49 billion) in economic losses and highlighted the vulnerability of infrastructure, businesses and communities.
Climate-related risks are increasingly relevant across banking, utilities, plantations, manufacturing, logistics and real-estate sectors.
The introduction of TCFD-aligned sustainability disclosures, the expansion of the JC3 Climate Data Catalogue and the implementation of RMK-13 and NETR are
accelerating demand for climate-risk analytics and adaptation solutions, said BIMB.
It opined that AI can help institutions improve risk identification, scenario analysis and resilience planning across investment portfolios and business operations.
It also sees Malaysia’s climate and digital transition creating long-term investment opportunities.
“Growing investments under NETR are expected to increase demand for AI solutions in renewable energy, smart grids and climate-risk management,
benefiting companies involved in digital infrastructure, cloud computing and
advanced analytics,” it said.
According to BIMB, NETR is expected to mobilize more than MYR 600 billion ($146.72 billion) of investments by 2050, creating long-term demand for digital infrastructure, renewable energy, smart-grid technologies and climate analytics.
“As climate-related spending increases, AI is expected to become a key enabler of operational efficiency, risk management and investment decision-making,” it said.
It noted Malaysia’s institutional investors, including pension funds, insurers, government-linked investment companies (GLICs), and asset managers, are well-placed to scaleAI-enabled climate resilience post-RMK-13.
“By leveraging global best practices and domestic policy frameworks, they can protect portfolios from systemic risks and unlock growth opportunities,” it added.
It is noted that strategic actions for investment committees are grouped into four thematic clusters as a practical playbook – digital infrastructure (data centers, cloud); climate adaptation (flood resilience); energy transition (renewables, grids); sustainable (finance Sukuk, carbon markets).
For utilities and energy, the research house sees AI enhances grid management, renewable-energy integration, demand forecasting and asset optimization.
“As Malaysia advances its energy-transition agenda, utilities are expected to become major beneficiaries of AI-enabled operational efficiency,” it noted.
As for banks and insurers, BIMB opined that climate-risk analytics can improve underwriting, credit assessment and catastrophe modelling while enabling more effective management of climate-sensitive exposures.
As for plantations and agriculture, it noted AI-powered weather forecasting, crop monitoring and precision farming can improve yields and resilience against changing weather patterns.
As for infrastructure and property, it said predictive flood modelling, satellite analytics and digital twin technologies support resilient infrastructure planning and asset protection.
AI demand powers Malaysia tech outlook despite risks – analysts