Bank Negara Malaysia (BNM), together with the World Bank Group and the UNDP Biodiversity Finance Initiative (UNDP BIOFIN), has released a new report aimed at strengthening how financial institutions assess risks and opportunities linked to nature and biodiversity.
The report, titled “A LEAP for Nature: Advancing Nature-related Financial Risk and Opportunity Assessment in Malaysia,” examines how financial systems depend on natural ecosystems and how environmental degradation can translate into economic and financial risks.
Officials said the study highlights the growing importance of integrating nature-related considerations into financial decision-making, including strategy development, risk management, and capital allocation. It also underscores how biodiversity loss and ecosystem decline can directly affect financial stability and long-term economic resilience.
The report provides guidance for financial institutions, companies, and public sector organizations on how to identify, measure, and manage their dependencies and impacts on nature. It encourages the development of more systematic approaches to evaluating nature-related risks while also identifying emerging opportunities in the transition toward a more sustainable economy.
According to Bank Negara Malaysia Assistant Governor Madelena Mohamed, financial institutions must better understand their reliance on nature and the risks associated with environmental change. She emphasized that incorporating these factors into decision-making processes is increasingly urgent for maintaining economic stability.
World Bank Group officials noted that nature underpins much of economic activity but is often undervalued in traditional financial systems. They said improved assessment frameworks can help businesses and governments manage risks more effectively while supporting sustainable development goals.
UNDP representatives highlighted that nature plays a critical role in supporting livelihoods, food security, supply chains, and long-term resilience. They stressed that understanding nature-related risks is essential for building a more competitive and sustainable economy.
The initiative reflects a broader regional and global shift toward integrating environmental sustainability into financial regulation and investment practices. Authorities say the framework is expected to help strengthen Malaysia’s financial system while supporting its transition toward a nature-positive economic model.
