On 2 December 2022, Bank Negara Malaysia announced the release of its policy document, Climate Risk Management and Scenario Analysis.

The policy document came into effect on 30 November 2022, apart from:

  • paragraphs 7 to 11 on governance, strategy, risk appetite and risk management, which will come into effect on 31 December 2023;
  • paragraphs 9 to 14 on scenario analysis, metrics, targets and disclosure, which will come into effect on 31 December 2024.

Notwithstanding the foregoing, the following paragraphs will come into effect on 31 December 2024:

  • strategy – paragraphs 9.2 and 9.4;
  • risk appetite – paragraph 10.3; and
  • risk management – paragraphs 11.9(a) to (c).

The policy document:

  • applies to:
    • entities licensed under the Financial Services Act 2013 and the Islamic Financial Services Act 2013;
    • the financial holding companies of these entities; and
    • development financial institutions prescribed under the Development Financial Institutions Act 2002; and
  • sets out the principles and specific requirements relating to the management of climate-related risks by financial institutions with the aim of enhancing the resilience of the financial sector against climate-related risks.

For further information on this topic please contact Pamela Kung at Shearn Delamore & Co by telephone (+60 3 2027 2911) or email ([email protected]). The Shearn Delamore & Co website can be accessed at www.shearndelamore.com.