Malaysia's financial sector tackles nature-related risks
Madelena Mohamed, Assistant Governor of Bank Negara Malaysia, highlighted the growing importance of nature-related financial risks and opportunities for Malaysia's financial sector. She spoke at the launch of a new report on advancing nature assessment in Kuala Lumpur on June 11, 2026.
Unlocking nature's economic potential
Madelena Mohamed emphasized that nature underpins all economic activities, yet remains largely invisible in financial decision-making.
She highlighted significant nature-positive business opportunities, citing a potential USD4.3 trillion in annual value and 232 million jobs in Asia-Pacific by 2030.
Examples include sustainable agriculture, which boosts yields and reduces reliance on synthetic fertilisers, and eco-tourism, a strategic driver for Malaysia aiming for RM329 billion in receipts under Visit Malaysia 2026.
Nature-based solutions like mangrove restoration also offer coastal protection and climate resilience, reducing long-term infrastructure costs.
Malaysia, as one of 17 megadiverse countries, possesses natural capital that acts as economic assets, regulating water supply and sustaining livelihoods.
Dependencies create financial vulnerabilities
Real and growing risks stem from nature's link to the economy.
Physical risks, like water supply disruptions and flooding, directly impact businesses.
Transition risks arise from evolving policies and market expectations, affecting firms with significant negative environmental footprints.
For financial institutions, these translate into higher credit and liquidity risks, affecting portfolio valuations.
BNM research found 54 percent of Malaysian bank loans are to sectors highly dependent on ecosystem services, and 36 percent to sectors with high impacts on nature.
This urges systematic integration of nature into financial decision-making.
Progress over perfection
Integrating nature into finance is complex, far exceeding climate mitigation due to its multi-dimensional nature.
This report offers crucial guidance, but its success hinges on firms embedding these considerations beyond mere compliance.
Real progress demands proactive leadership, taking imperfect but necessary first steps.