As the world confronts the escalating climate crisis, the financial sector has emerged as a critical player in steering global economies toward a low-carbon, sustainable future. This report delves into how transition finance is essential for decarbonising high-emission industries, to achieve their climate goals without compromising growth.

Through an in-depth analysis of global transition finance experiences, the report identifies key obstacles such as a lack of standardised frameworks and varying industry readiness. Based on these insights, the FIRST strategy is introduced, offering a structured approach to guiding Malaysia’s transition finance efforts. This strategy focuses on regulatory support, sector-specific pathways, effective incentives, financial innovation, and transparent reporting to align Malaysia’s transition with global climate targets.

Drawing on lessons from regional leaders like Japan, India, Thailand, and Singapore, the report also underscores the importance of more tailored transition finance strategies. Japan’s pioneering issuance of sovereign transition bonds, India’s alignment with global green finance standards, and Thailand and Singapore’s financial incentives for decarbonising high-emission sectors offer valuable insights that Malaysia can adopt. These case studies demonstrate that regional collaboration, robust regulatory frameworks, and private investment are key to scaling transition finance.

By adopting the FIRST Strategy, Malaysia can position itself as a leader in sustainable finance, attract international capital, and create a resilient, low-carbon economy. The time for action is now, and this report provides the pathway to turn ambition into reality.

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