INSIGHT by the Climate Bonds Initiative
Capital Markets Malaysia (CMM), an affiliate of the Securities Commission Malaysia (SC) in collaboration with the Climate Bonds Initiative (Climate Bonds) today launched its interactive Transition Strategy Toolkit (link is external) (toolkit) that is aimed at supporting local and regional efforts towards the global net zero goal by leveraging transition finance amongst mature and mid-tier corporates. The toolkit is designed to offer corporations in ASEAN seeking to attract private capital for their transition needs with insights on building credible science-based climate transition plans that are aligned to the Paris Agreement or respective national climate targets.
The toolkit details the underlying principles and elements to be incorporated when developing climate transition plans, by guiding users through the Climate Bond’s Five Principles for an ambitious transition to lay the groundwork that enables investors to easily identify investments that support a low-carbon transition.
“The capital market is well positioned to facilitate effective capital mobilisation to finance the decarbonisation of businesses, industries, and economies. With the global shift towards a low-carbon economy, recent policy initiatives such as the National Industrial Masterplan and the National Energy Transition Roadmap pave the way for the development of new green economic opportunities in Malaysia.
The launch of this Toolkit builds on the SC’s continued efforts to support these national policies and frameworks. The Toolkit will provide practical guidance to corporations on setting credible transition strategies to attract private capital for transition projects, benchmarked against the Climate Bonds Initiative’s ambitious transition methodology. It also offers a broader regional lens through the incorporation of the latest version of ASEAN Taxonomy criteria and complements the recently launched ASEAN Transition Finance Guidance.”
-Datin Azalina Adham, Managing Director of the SC and Board Member of CMM
“We are delighted to collaborate with CMM to develop this toolkit for ASEAN corporations. Transition plans are essential in the journey towards the Paris goals. They must be built on clear targets, effective strategies, ample financial support, and unwavering leadership. Harmonisation of key principles underpinning transition plans will encourage the flow of green capital to ASEAN businesses.”
-CEO and Founder of Climate Bonds, Sean Kidney
The web-based Toolkit (link is external) utilises an interactive question and answer (Q&A) interface that begins with a risk assessment supported by key definitions and the Climate Bonds’ methodology to offer essential and systematic guidance on areas to consider when developing comprehensive transition plans. By going through the interactive Q&A, businesses will be able to determine where they stand and identify key areas to address to achieve the 5 Hallmarks that are fully aligned with and build on the thematic guidelines from the International Capital Market Association (ICMA), as well as the disclosure requirements from the Task Force on Climate-Related Financial Disclosures (TCFD).
The hallmarks include Paris-aligned performance targets, robust plans with a clear step-by-step qualitative implementation plan towards targets, actions being implemented with identified metrics and indicators to assess delivery, governance of accountability mechanisms and leadership systems needed to drive the transition as well as transparent disclosures for credibility and comparability across national and global peers.
In conjunction with the launch of the toolkit, CMM hosted a one-hour webinar on the topic of Transition Finance in ASEAN on 27 March 2023, featuring speakers from the Climate Bonds Initiative, UK Transition Plan Taskforce (TPT) and the Securities Commission Malaysia on the ASEAN Transition Finance Guidance.
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