KUALA LUMPUR: Bank Negara has issued an Exposure Draft on Climate Risk Management and Scenario Analysis, which sets out the proposed requirements and guidance on climate risk management and scenario analysis.

       It said the proposed specific requirements and expectations are to ensure that financial institutions strengthen the management of financial risks stemming from climate change to enhance the resilience of the financial sector against climate-related risks and to facilitate an orderly transition to a low-carbon economy.

       “This exposure draft complements the Climate Change and Principle-based Taxonomy, Value-based Intermediation Financing and Investment Impact Assessment Framework (VBIAF), as well as the VBIAF Sectoral Guides,” the central bank said.

       Bank Negara also said that with respect to scenario analysis and stress testing, it will be providing additional guidance to the financial institutions in a forthcoming discussion paper on Climate Change Stress Test. — Bernama