In support of this, we are currently working through the JC3 to develop Guidance Documents on Climate Risk Management and Scenario Analysis. An Application Guide is also being developed to encourage and improve TCFD-aligned disclosures by financial intermediaries. Third, we are ramping up our engagement and capacity building efforts to support climate action and risk management in the financial sector. The JC3 actively engages with various stakeholders on climate and transition initiatives. As part of its advocacy role, JC3 also contributes to the formulation of national climate policies to promote alignment with the financial sector’s response to climate risks. In addition, the JC3, working with selected knowledge partners, will continue to deepen its stack of technical programmes to strengthen the knowledge and competencies of financial professionals in this area. Fourth, we are collaborating with the industry to promote an enabling environment for green financing and investments. Building on work undertaken to identify market gaps and barriers, JC3 members are working to develop concrete measures to enhance the demand and supply of green finance. This includes solutions to support and accelerate climate risk mitigation and adaption by firms along the supply value chain. Fifth, we are working to identify and address critical data gaps in climate and environmental 2/5  BIS central bankers' speeches  risks-related information. Without adequate and good quality data, we will not be able to make informed assessments and judgments. This is especially important for climate risk management, disclosure and scenario analysis.
Given its central role in helping people to save, borrow, invest or make payments, the financial sector is in a unique and powerful position to contribute beyond climate change, towards the broader sustainability agenda, including helping to end poverty and to reduce inequality. Funding remains a key challenge for many sustainability projects. Thus, the financial sector can be more deliberate in funding sustainability initiatives and incentivising investments in low carbon sectors. There are many such opportunities available. For example, projects under the National Investment Aspirations (NIA) framework, the Malaysian Climate Action Council (MyCAC)'s plan for Malaysia to be a hub in green economy, services and technology and the Low Carbon Mobility Development Plan 2021–2030. 3/5  BIS central bankers' speeches  To meet the funding needs, it will not be sufficient for financial institutions to use traditional instruments. They will need to think creatively to develop new and innovative solutions which also takes into account the current challenges faced by businesses and individuals. Blended finance, for example, is a viable option for businesses that struggle with both the impact of climate change and the losses from the pandemic. In combining concessional financing and commercial funding, such as combining philanthropic funds or social finance instruments and traditional lending, blended finance approaches can avoid excessive debt loads that could increase future risks. There are also significant opportunities for financial institutions to support a green recovery from the pandemic through the provision of transition financing linked to sustainable practices. Climate change is not just a scientific issue.