PUTRAJAYA, Jan 27 — The Malaysia Sustainable Development Goals Foundation (MySDG Foundation), which launched today, will be a platform for better coordination of grants from various sources.
Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said various funds had been set up and managed by stakeholders to address issues pertaining to poverty eradication, wildlife welfare, and environmental and biodiversity conservation.
However, he said the funds could not sustain due to financial constraints to facilitate the implementation of long-term programmes and projects.
“Hence, there is an urgent need to ensure a more coordinated and integrated fund management to finance programmes and projects in the country that are likely to be outside the scope of the government’s annual allocation,” he said.
Tengku Zafrul was speaking at the launch of the MySDG Foundation by Prime Minister Datuk Seri Ismail Sabri Yaakob, here today.
The foundation will be governed by a board of trustees comprising respected individuals in the public sector, industry players, civil society leaders, as well as experts in specific fields.
The board will set strategic priorities for the fund based on the SDG pillars, as well as seek public feedback and input on upcoming projects.
“All programmes and projects under this fund are also subject to a thorough and transparent selection, monitoring, reporting, and auditing process,” Zafrul said.
He said MySDG, on the whole, would convince donors to contribute as they know that their funds would be managed in accordance with international best practices and supported by good governance.
“They will also be assured that their contributions will be used to fund programmes and projects in line with the SDGs,” he said.
Tengku Zafrul said since leading the Ministry of Finance (MoF) in March 2020, he has been working hard to ensure that the country’s annual budget is fully aligned with the SDGs, with every programme and project mapped to at least one SDG.
He said the initiative would not only enable analysis of the annual budget to be made through the lens of the SDGs, but could also identify any funding gaps across all the SDGs and identify the resources needed to address them.
“To improve the level of transparency, the MoF now reports operating and development expenditure in accordance with the SDGs in the budget documents provided. In fact, Malaysia is one of only 10 countries in the world to do so,” he said.
Tengku Zafrul said the MoF had also taken several additional steps to achieve the SDGs, including issuing the world’s first sovereign Sustainability Sukuk in US dollars last April with a subscription surplus of 6.4 times, with the issue size increased from US$1 billion to U$1.3 billion (RM4.2 to RM5.46 billion)
Besides, he said the high demand had also resulted in a very competitive rate of yield or return, as well as global recognition.
“For this year, as announced in Budget 2022, the government will issue Sustainability Sukuk of up to RM10 billion to be channelled to eligible social or environmentally-friendly projects,” he said.
Tengku Zafrul said the government was also working with various international bodies to strengthen the country’s financing capacity to meet the development needs of the SDGs.
“One of the ongoing projects involves collaboration between the MoF and the United Nations Development Programme (UNDP) to create an Integrated National Funding Framework for sustainable development, in which it includes platforms for innovation and reform, as well as public-private partnerships,” he said.
The Finance Minister said besides, the use of the Government Green Procurement (GGP) method since 2013 has been increased to support the use of environmentally-friendly products and services.
He said the GGP had involved 26 ministries in 2020 with an estimated value of RM590 million and the government would continue to expand this initiative, as well as improve guidelines to improve public sector green initiatives.
Tengku Zafrul said Malaysia’s progress on sustainable financing was a key driver of the sustainability agenda.
He said one of the initiatives in this direction was the establishment of the Joint Committee on Climate Change (JC3) led by Bank Negara Malaysia and the Securities Commission Malaysia.
“Among JC3’s efforts are the introduction of a Principles-Based Taxonomy, as well as the development of the SRI Taxonomy, and the updating of the Malaysian Code on Corporate Governance in 2021,” he said.
He said all the guidelines would enhance the role of financial institutions and capital markets in financing sustainability.
The effort has also helped the financial and corporate sectors integrate environmental, social and governance factors in their investment valuation, he added.