Alongside Bank Negara Malaysia, the regulatory body will identify if companies are prepared to comply with the guidelines’ technical screening criteria (TSC), which refers to the quantitative or qualitative criteria against which the classification of a firm’s activity is assessed.

The Asean Taxonomy for Sustainability Financing is designed to be an inclusive and credible classification system for sustainable activities.

It will serve as a common language across the different jurisdictions to communicate and coordinate on labelling for economic activities and financial instruments.

The results of these stakeholder consultations will be taken into consideration to finalise the taxonomy’s second version, which is set to take effect in early 2024.

Version 2, which was released on March 27, consists of the TSC for a few focus areas, namely electricity, gas, steam and air conditioning supply in the energy sector.

“The refinement in Version 2 is a vital step in steering Asean as a region and its member states individually to transition towards sustainability,” said SC chairman Awang Adek Hussin.

SC believes these taxonomies, collectively, will create opportunities and spur more investment flows, including foreign funds into the country.