It is evident that businesses must transition to be sustainable to keep pace with the global race towards net zero. As an exporting nation, Malaysia must also prepare for tightening of climate-related regulations that may be imposed by our trading partners. Small and medium enterprises (SMEs) that form 37.4% of Malaysia's economy3 are the most susceptible. According to report findings by the Sustainable Finance Institute Asia 2022, SMEs stand to lose RM292 billion in revenue due to non-ESG compliance4. The silver lining behind these adversities is the immense growth opportunities. Studies have shown that sustainability investments reward businesses through higher premiums 5 , better brand value, and lower operating expenses6. Without the necessary support, the ambition to achieve net zero would be a tall order for SMEs, which lack funding and knowledge for meaningful transition. In this regard, the Bank launched the RM2 billion Low-Carbon Transition Facility (LCTF) in February 2022 to fund SMEs' working capital or capital expenditures related to low-carbon practices at an affordable rate. Beyond that, other facilities such as the High Tech and Green Facility and SME Automation and Digitalisation Facility are also available for  1/3  BIS - Central bankers' speeches  SMEs. In this respect, it is important to note that financing by the financial sector has returned to the pre-pandemic level with funds by BNM only constituting less than 10% of the total financing. We acknowledge that technical know-how is equally crucial for successful transformation.
SMEs need to be nurtured and equipped with the right tools and skill sets to kickstart their sustainability journey on the right footing. The roll-out of the Greening Value Chain Programme, or GVC in short, is a testament to the Bank's commitment to ensure SMEs have access to the necessary support to implement longterm impactful changes. GVC complements available financing via its complimentary technical workshops, financial advisory services and emission measurement tools provided by the strategic partners. Before I end my remarks, I wish to highlight the two key success factors of the GVC initiative. First, strong commitment from participants to undergo the programme and implement the changes recommended. This requires a genuine desire to transition to a greener and more sustainable practices, as well as willingness to invest the necessary resources and time to make it happen. Participants must be committed to making real changes, both in your operations and in the products and services that you offer. Second, proactive actions from large corporations in greening their supply chain network is a must - given their unique position to drive critical mass transition. GVC is the first of many pilot initiatives to come in gearing up our green agenda, and we hope to see more similar private-public partnerships in the future. The Bank remains committed playing bridging role by bringing the national green agenda closer to the public. For this, we welcome any potential partners who are keen to explore new areas of collaboration. Ladies and Gentlemen, Climate change is here to stay.