In September of this year, a Regional Conference on Climate Change was organised to raise awareness and call for action in managing climate change risks and opportunities, attracting more than 500 board of directors and senior management of financial institutions, 3/5  BIS central bankers' speeches  regional central banks and supervisory authorities. A technical workshop had also been hosted earlier by the Bank with strategic partners to evaluate and manage environmental and social risks in the energy and primary commodity sectors for VBI CoP members and risk managers of financial institutions. Another focus area of the Bank is in developing greater standardisation of understanding and definition of green finance for the domestic financial industry. The development of a principlesbased taxonomy aims to achieve this, which would support informed decisions and analysis of exposures to climate change in fund raising, lending and investment activities. Ultimately, this can potentially increase financing to green projects. The first draft of the taxonomy is targetted before the end of this month and we would welcome feedback from the industry on this. The Joint Committee on Climate Change is also there to build industry capacity, by sharing knowledge, expertise and best practices in assessing and managing climate-related risk. The four sub-committees formed under the Joint Committee are in the midst of developing their action plans, including strategies and initiatives to upskill financial institutions in managing climate-related risks and transition to a low carbon economy.
The formation of the VBI Community of Practitioners manifests the leadership by Islamic banks in this area with some of its members also being part of the Joint Committee on Climate Change (JCC) that was recently formed in September and chaired by the Bank and Securities Commission. The JCC aims to look at and create greater synergy in development of climate-related solutioning for the capital and financial markets. It should be noted that many VBI offerings of Islamic banks are already meeting contemporary sustainability themes but more will be forthcoming. Those already on offer include green and specialised financial products and services for retail and SME markets, financial solutions for lower income households, custom products for women entrepreneur and SMEs, green solutions that promote environmental sustainability and innovative solutions that promote physical and mental well-being. Takaful operators are also taking steps to explore value-based protection for their customers. A dedicated task force has been formed by the takaful industry to formulate a strategic roadmap to advance VBI in their business offerings and practices. VBI also encourages Islamic financial institutions to play a greater nurturing role in advocating sustainable practices among clients, such as adoption of Malaysian Sustainable Palm Oil Certification, as well as providing necessary funding and technical advisory services. Part of the progress in advancing VBI as a driver for positive change in the Islamic financial services industry has been the Bank’s role in working collaboratively with the VBI Community of Practitioners.