28 July 2022

On 29 June 2022, the Joint Committee on Climate Change (JC3) released the Task Force on Climate-related Financial Disclosures (“TCFD”) Application Guide for Malaysian Financial Institutions which outlines key recommendations supplemented by the relevant descriptions, guidance notes, considerations and examples that could be utilised as practical resources to facilitate the adoption of TCFD Recommendations by the Malaysian financial industry. JC3 was established in September 2019 as a platform to pursue collaborative actions for building climate resilience within Malaysia’s financial sector, with its initiatives undertaken in the areas of risk management, governance and disclosure, product and innovation, engagement and capacity building, and bridging data gaps. It is co-chaired by the Deputy Governor of Bank Negara Malaysia and the Deputy Chief Executive of Securities Commission Malaysia.

The TCFD is established to develop recommendations for more effective climate-related disclosures to facilitate more informed financial and business decision-making in addressing climate-related risks and opportunities. Enhanced disclosures would enable stakeholders to better understand and assess companies’ exposure to and management of climate-related risks in a transparent and consistent manner.

The benefits of implementing the TCFD Recommendations include:

  • easier or better access to capital driven by increasing investors’ and financiers’ confidence;
  • more effective fulfillment of existing disclosure requirements pertaining to reporting of material information in financial filings; and
  • better understanding and management of material risks that revolve around climate change in a more strategic and comprehensive manner.