This comprehensive report assesses Malaysia’s current landscape, progress, and future prospects in Islamic climate finance. It highlights the nation’s strong commitment to climate action and how Malaysia has strategically leveraged its world-leading Islamic finance ecosystem, including the SRI Sukuk Framework, Value-based Intermediation (VBI), climate-related taxonomies, and supporting national policies, to advance sustainability and low-carbon development. The report elucidates the close relationship between maqāṣid al-Sharīʿah and climate finance, drawing on broader Islamic doctrines that reinforce ethical and sustainable financial practices.
Drawing on national data, regulatory insights, case studies, and sectoral analysis, the report provides an in-depth examination of Malaysia’s climate financing needs, estimated at up to RM1.85 trillion for the energy transition alone, as well as emerging opportunities for Islamic finance to bridge the climate funding gap. It also outlines challenges such as adaptation finance gaps, data limitations, and greenwashing risks, and proposes strategic recommendations for policymakers, regulators, and industry players.
This report is a valuable resource for policymakers, financial institutions, sustainability practitioners, corporations, and scholars seeking to understand the evolving intersection of Islamic finance and climate action in Malaysia.
