Malaysia Sustainable Taxonomy: Consulting Firm

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ASSIGNMENT OVERVIEW
Assignment Title: Malaysia Sustainable Taxonomy: Consulting Firm
Assignment Countries:
Malaysia
ASSIGNMENT DESCRIPTION
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IFC— a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2025, IFC committed a record $71.7 billion to private companies and financial institutions in developing countries, leveraging private sector solutions and mobilizing private capital to create a world free of poverty on a livable planet.

For more information, visit
www.ifc.org
.
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IFC’s Country Advisory and Economics (CAE) Department delivers advisory services to governments, regulators, and other stakeholders to design and implement reforms that remove policy and regulatory bottlenecks to private sector development. One of CAE’s key priority areas of work in East Asia Pacific is to support the development of sustainable finance markets in financial sector by strengthening policy frameworks and standards, including establishment of national taxonomies. In Malaysia, CAE is supporting Bank Negara Malaysia (BNM) in the development of the Malaysia Taxonomy for Sustainable Finance (Malaysia Taxonomy), with the objective of enhancing the coherence, credibility, and usability of sustainable and transition finance frameworks, in alignment with regional and international standards.
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Malaysia’s rapid economic development has been accompanied by increasing environmental pressures, including deforestation, water pollution, and waste management challenges, with implications for climate resilience, biodiversity conservation, and resource sustainability. In response, Malaysia has articulated ambitious climate and environmental policy commitments, including achieving net-zero greenhouse gas emissions by 2050, reducing carbon intensity by 45 percent by 2030 (from 2005 levels), and implementing the National Policy on Biological Diversity (2022–2030). Despite this strong policy direction, the scale of investment required to achieve these objectives remains substantial, and mobilizing private capital at scale continues to be a key challenge.
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Moreover, Malaysia has made notable progress in embedding climate and sustainability considerations into financial decision-making, including through the issuance of the Climate Change and Principle-based Taxonomy (CCPT) and the Principles-Based Sustainable and Responsible Investment (SRI) Taxonomy. The broader sustainability landscape has also evolved at the regional and global levels, most notably with the development of the ASEAN Taxonomy for Sustainable Finance(ASEAN Taxonomy), which introduced a science-based framework and technical screening criteria for priority and enabling sectors. In parallel, investor expectations have expanded to encompass a broader range of risks, including climate adaptation, nature-related, and social considerations, prompting both financial institutions and real sector participants to adopt more comprehensive sustainability risk assessment and management practices.
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To support the effective mobilization of sustainable and transition finance, Malaysia requires a clear, credible, and technically robust framework to define and classify green and transition economic activities. While existing principle-based taxonomies provide an important foundation, the absence of harmonized technical screening criteria has limited consistency, usability, and comparability across sectors and financial products. This has constrained the ability of financial institutions to systematically identify, assess, and finance eligible activities, thereby limiting the scale-up of sustainable finance and innovative market instruments.
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BNM and SC have jointly established the Malaysia Taxonomy Taskforce as the governance model to oversee the development of the Malaysia Taxonomy. The Malaysia Taxonomy is intended to serve as a unified national reference framework with clear definitions, classification criteria, and technical guidance for identifying sustainable and transition activities, while ensuring interoperability with regional and international taxonomies.
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This assignment aims to support the development of a unified, technically grounded Malaysia Taxonomy with strong interoperability with regional and international frameworks (e.g. ASEAN Taxonomy), covering multiple environmental objectives, including:(i) climate change mitigation, (ii) climate change adaptation, (iii) protection of healthy ecosystems and biodiversity, and (iv) resource resilience and the transition to a circular economy. The taxonomy will also incorporate Do No Significant Harm (DNSH) and Minimum Social Safeguards (MSS) considerations to st