Banks, insurers, and takaful operators in Malaysia will get new guidance to support implementation of the National Sustainability Reporting Framework (NSRF), as regulators seek to make sustainability-related disclosures more robust, consistent, comparable, and purposeful.
The Joint Committee on Climate Change (JC3), co-chaired by Bank Negara Malaysia and the Securities Commission Malaysia, issued the NSRF Guidance Documents for Banks and Insurers and Takaful Operators following its 17th meeting on Aug. 6.
The guidance addresses common implementation challenges in sustainability reporting, including risk and opportunity assessments, strategy disclosures, and the use of metrics and targets.
Hands-on capacity-building programmes will begin in October 2026 to support implementation.
“The NSRF Guidance Documents will help financial institutions and insurers and takaful operators navigate reporting challenges and support their transition towards high-quality, decision-useful sustainability disclosures,” said Neetasha Rauf, chief sustainability officer of the Securities Commission Malaysia and co-chair of JC3.
She said the guidance also complements the efforts of the Advisory Committee on Sustainability Reporting in providing implementation and capacity-building support for scoped-in entities.
The guidance points to a shift from broad sustainability commitments towards practical implementation, with financial institutions expected to strengthen how they assess risks and opportunities, explain strategy and use metrics and targets.
More consistent disclosures could also improve comparability across banks, insurers and takaful operators.
JC3 members also agreed to fully adopt the ASEAN Taxonomy for Sustainable Finance as the basis for the Malaysia Taxonomy. This marks a significant step towards greater regional interoperability, consistency and comparability in sustainable finance.
The regulators said this also reduces the operational burden of businesses, especially those with cross-border trade.
JC3 will develop practical guidance and tools tailored for local implementation. A pilot with selected members will ensue prior to full adoption for reporting in 2028.
The pilot aims to identify implementation challenges and inform further refinements, where necessary.
“A taxonomy is only effective if it can be applied consistently and confidently,” said Madelena Mohamed, assistant governor of Bank Negara Malaysia and co-chair of JC3.
As Malaysia adopts the ASEAN Taxonomy as the foundation of the Malaysia Taxonomy, JC3 will focus on developing practical implementation guidance and tools to support its use.
To support Malaysia Taxonomy implementation and sustainable finance growth, JC3 will explore a centralised climate- and nature-related data platform.
Better access to reliable data will help financial institutions, businesses, and investors assess risks and opportunities, meet reporting requirements and channel capital to sustainable and transition activities.
The meeting noted further progress under the Climate Finance Innovation Lab (CFIL), which continues to connect climate- and nature-related projects with funding opportunities.
Under the second cohort, 22 projects seeking RM1.73 billion ($410 million) in funding will undergo a structured accelerator programme in collaboration with the United Nations Global Compact Network Malaysia, Brunei and Cambodia.
This segment will support business model refinement, impact assessment and funding facilitation. Interested funders are encouraged to engage with CFIL to help scale impactful climate- and nature-related solutions.
CFIL provides a practical financing channel alongside the reporting and taxonomy initiatives.
By connecting climate- and nature-related projects with funding opportunities, the programme could help move Malaysia’s sustainable finance agenda from frameworks and disclosure requirements towards actual capital mobilisation.
The meeting reaffirmed the need to move faster from commitment to mobilising practical solutions.
Priorities include supporting energy transition, strengthening climate resilience especially against floods, and strengthening mechanisms to measure and report outcomes.
The JC3 is a platform established in September 2019 to pursue collaborative actions for building climate resilience within the Malaysian financial sector.
It is co-chaired by Madelena Mohamed, Assistant Governor of Bank Negara Malaysia, and Neetasha Rauf, Chief Sustainability Officer of the Securities Commission Malaysia, with members comprising senior officials from Bursa Malaysia and 25 financial industry players.