Climate integration in portfolios is becoming mainstream investment practice in Malaysia. More than half (60%) of 10 Malaysia’s most important institutional investors assessed now recognise the financial risks and opportunities linked to climate change.
From the same dataset, 50% of Malaysia’s investors are including climate into their investment policies, as Malaysian investors continue to exhibit active components of investor climate transition planning.
The data is an exclusive Malaysia extract that complements the sixth edition of the Asia Investor Group on Climate Change (AIGCC)’s annual flagship report, ‘The State of Investor Climate Transition in Asia 2025’, which reviews 230 of the most significant and influential investors across Asia. AIGCC’s analysis uses 26 climate metrics to assess investors’ performance in managing their climate risks and opportunities.
In addition, AIGCC’s research finds a growing proportion of Malaysia’s investors are progressing in several aspects of climate governance and climate investment, including:
- Climate Solutions Investments. 40% of Malaysian investors now have a target, or track investments in, climate solutions or transition finance. However, despite clear enthusiasm and progress in-market, these currently only relate to a small portion of the portfolio.
(vs Overall Asia Investor Average of 35%)
- Board-Level Oversight of Climate Change. 50% of Malaysian investors are integrating climate into their corporate governance oversight.
- Net Zero Portfolio Emissions Commitment. 40% of Malaysian investors have now pledged to achieve ‘net-zero’ portfolio emissions.
While Malaysia’s investors have accelerated their progress in many climate metrics, AIGCC has identified key areas for Malaysian investors to prioritise in their climate transition journey, including disclosures, corporate engagement, and policy advocacy:
- Annual Stewardship/Engagement Report: 20% of Malaysia’s investors have published stewardship reports, indicating a gradually increasing investor expectation within the market to disclose climate corporate engagement-related activities.
- Publication of advanced scenario analysis: Malaysia’s investors do not yet appear to be undertaking and disclosing climate scenario analysis results.
- Transparency and support of climate policies: Malaysia’s investors do not yet publicly disclose support or actions relating to climate policy advocacy and related engagements.
AIGCC CEO, Rebecca Mikula-Wright said: “We are encouraged to see that Malaysia’s investors are demonstrating climate progress, especially through an increased interest in scaling climate solutions or transition finance, as this shows clear and growing intent from the private sector to finance a low-carbon economy. This is crucial for achieving Malaysia’s goal of having 70% renewable energy capacity in its energy mix by 2050.
“However, to fully realise the climate transition, investors can advance progress across all climate metrics, particularly in areas such as corporate engagement and climate policy advocacy.
“We encourage a collaborative and open dialogue between investors, corporates and policymakers to create a supportive policy and regulatory environment in Malaysia for climate-aligned investment that is also in line with investors’ best financial interests. We look forward to deepening our engagement in the market and supporting the enthusiasm of the local investors to work on climate issues.”
AIGCC will present more insights in an in-depth investor briefing to be held in Kuala Lumpur, Malaysia on 8 April 2025, focussing on data from AIGCC’s flagship report, State of Investor Climate Transition in Asia and the performance of Malaysia-headquartered investors.
AIGCC thanks MSCI for their sponsorship of the report and event as well as Climate Governance Malaysia for hosting the event. The event is also supported by S&P Global.
AIGCC’s ‘The State of Investor Climate Transition in Asia’ report is the most comprehensive and reliable snapshot of how decision-makers in the region’s capital markets are managing climate and nature; perhaps the biggest factors influencing the region’s long-term economic development.
AIGCC remains committed to empowering Malaysia’s investors and government to accelerate the transition to a sustainable, resilient future, including supporting Malaysia’s investors in achieving real-economy impact.
Access the full report here