KUALA LUMPUR, Feb 25 — The Joint Committee on Climate Change (JC3) has outlined four initiatives to further strengthen the financial industry’s capacity in managing climate-related risk and enhance its role in green finance for 2021.

It said the committee’s fourth meeting yesterday set priorities to develop guidance documents on risk management and scenario analysis.

"This will complement the implementation of Climate Change and Principles-Based Taxonomy (CCPT) and advance climate risk management and stress testing practices in the financial sector,” it said in a joint statement issued by Bank Negara Malaysia and Securities Commission Malaysia today.

JC3 will also support the implementation of climate-related disclosures that are aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

The committee will broaden engagements with relevant stakeholders, including government agencies, institutional investors and market intermediaries to identify and address enabling conditions for the structuring of green financial products and solutions.

JC3 will also deepen technical capacity-building programmes, focusing in particular on strengthening the practical knowledge and tools to support climate-related disclosures, climate risk management, and climate scenario analysis.

Meanwhile, JC3 has also agreed to establish a dedicated data workstream to identify crucial climate and environmental related data and the relevant data sources, as well as solutions to bridge the data gaps.

"The work of the data workstream will also contribute towards a more consistent implementation of the CCPT,” it added.

The statement said JC3 members are stepping up efforts to implement TCFD disclosures in phases beginning this year.

"Members also agreed to identify specific business initiatives that support sustainable activities and pursue the adoption of internal financial targets for sustainability-related loans and financing, and assets under management,” it said. — Bernama