Welcoming Remarks by Mr Affendi Rashdi, Director-General of Labuan FSA at ESG Information and Outreach (IOI) Programme (Positioning Labuan IBFC as an ESG-Ready International Financial Centre)
ESG IINFORMATION aND OUTREACH (IOI) PROGRAMME
(Positioning Labuan IBFC as an ESG-Ready International Financial Centre)
(Positioning Labuan IBFC as an ESG-Ready International Financial Centre)
Affendi Rashdi
Director-General, Labuan FSA
30th September 2025
Tiara Labuan Hotel
Distinguished guests,
Ladies and Gentlemen,
Assalamualaikum warahmatullahi wabarakatuh,
Salam Sejahtera and a very good morning,
1. It is my great pleasure to welcome you to this Industry Information and Outreach (IOI) session on ESG. This session serves as a platform to refresh our understanding of sustainability developments, explore emerging trends and best practices and deepen our appreciation of its overarching principles.
2. It also provides an opportunity to reflect on the role each of us can play in advancing sustainability practices within our organisation and the wider industry in fostering long-term value creation that balance economic, environmental and social outcomes.
3. As you may have recalled, earlier this year, Labuan Financial Services Authority, in collaboration with industry, has established the Labuan IBFC for ESG Joint Working Group or “LiFE JWG”. This cross-industry initiative plays a vital role to co-drive ESG initiatives across the Labuan IBFC by supporting the implementation of ESG-related developmental policies, standards and best practices. Today’s programme is an initiative under the LiFE JWG, held in collaboration with ALTC as the Industry Lead, to foster greater sustainability awareness and understanding through capacity building and outreach.
Ladies and gentlemen,
4. In today’s business world, the term ‘ESG’ which denotes Environmental, Social, and Governance, has become increasingly prominent as the lens through which sustainability is assessed. In this regard, sustainability has emerged as a pivotal consideration in business decision-making, serving as a key determinant of long-term viability and resilience of organisations. This is especially important as companies are increasingly scrutinised by investors, stakeholders, and the public. With growing expectations for greater transparency and accountability, understanding ESG has become crucial.
5. In this context, ESG matters because it drives both strategic and operational advantages for companies. Strong ESG credentials attract investors by signalling lower risk and long-term viability, while also helping companies stay ahead of evolving regulatory requirements. At the same time, responsible ESG practices enhance public perception and brand loyalty, improve operational efficiency through cost savings and innovation, and mitigate risks that could lead to legal or reputational challenges.
Ladies and Gentlemen,
Assalamualaikum warahmatullahi wabarakatuh,
Salam Sejahtera and a very good morning,
1. It is my great pleasure to welcome you to this Industry Information and Outreach (IOI) session on ESG. This session serves as a platform to refresh our understanding of sustainability developments, explore emerging trends and best practices and deepen our appreciation of its overarching principles.
2. It also provides an opportunity to reflect on the role each of us can play in advancing sustainability practices within our organisation and the wider industry in fostering long-term value creation that balance economic, environmental and social outcomes.
3. As you may have recalled, earlier this year, Labuan Financial Services Authority, in collaboration with industry, has established the Labuan IBFC for ESG Joint Working Group or “LiFE JWG”. This cross-industry initiative plays a vital role to co-drive ESG initiatives across the Labuan IBFC by supporting the implementation of ESG-related developmental policies, standards and best practices. Today’s programme is an initiative under the LiFE JWG, held in collaboration with ALTC as the Industry Lead, to foster greater sustainability awareness and understanding through capacity building and outreach.
Ladies and gentlemen,
4. In today’s business world, the term ‘ESG’ which denotes Environmental, Social, and Governance, has become increasingly prominent as the lens through which sustainability is assessed. In this regard, sustainability has emerged as a pivotal consideration in business decision-making, serving as a key determinant of long-term viability and resilience of organisations. This is especially important as companies are increasingly scrutinised by investors, stakeholders, and the public. With growing expectations for greater transparency and accountability, understanding ESG has become crucial.
5. In this context, ESG matters because it drives both strategic and operational advantages for companies. Strong ESG credentials attract investors by signalling lower risk and long-term viability, while also helping companies stay ahead of evolving regulatory requirements. At the same time, responsible ESG practices enhance public perception and brand loyalty, improve operational efficiency through cost savings and innovation, and mitigate risks that could lead to legal or reputational challenges.
6. Historically, nations globally concentrated predominantly on economic growth derived from conventional sectors. Today, we observe a paradigm shift as perspectives have realigned towards innovation, resilience, and sustainability. In fact, global issuance of sustainable bonds is projected to surpass US$1 trillion in 2025, underscoring the sustained drive toward climate action, resilience-building, and nature-positive initiatives. This trend underscores the importance of integrating sustainability into business strategies to avoid stagnation or decline. The global focus on ESG is evident, with the United Nations introducing 17 Sustainable Development Goals (SDGs) as a blueprint for member countries to achieve sustainable development.
7. In conclusion, ESG is not just about compliance or marketing. It represents a comprehensive way of doing business that aligns profitability with broader social and environmental concerns. Companies that integrate ESG principles into their core strategies are likely to thrive in an increasingly complex global market while also contributing positively to the communities they serve and the environment they depend on.
8. On the national front, the ESG landscape has undergone a remarkable transformation, in the past two years. Regulatory frameworks have become more stringent, stakeholder expectations have risen sharply, and the government is actively driving momentum, urging businesses to accelerate their ESG adoption and alignment. The message is clear: sustainability is no longer optional; it is imperative.
9. We are witnessing a pivotal shift in Malaysia’s development agenda. Under the 12th Malaysia Plan, the Madani Government has embarked on bold structural reforms aimed at repositioning the nation for long-term resilience and sustainability. Key initiatives such as the Madani Economy Framework and the National Energy Transition Roadmap (NETR) reflect a clear and strategic commitment to building a future that is economically robust, socially inclusive, and environmentally responsible.
10. These are not just policy statements. The government is offering financial incentives, matching grants, and ESG implementation guides particularly for SMEs. These strategic actions position businesses as frontrunners in sustainability, contributing to a more resilient, future-ready economy, one that aligns with Malaysia’s national commitment to achieving net-zero emissions by 2050.
11. Labuan FSA recognises the global and national shift towards sustainable development and is proactively integrating sustainability into its core operations. Our sustainability journey began in 2022 with the Labuan IBFC Strategic Roadmap 2022-2026, which outlined initiatives to embed sustainability into the development of Labuan IBFC. A key focus has been Islamic finance, given its natural alignment responsible and ethical business practices. That same year, we launched the Islamic Digital Asset Centre (IDAC) to create a digital market ecosystem and promote sustainable investment environment through tokenisation of real-world assets. We have also introduced the Labuan IBFC Sustainability Taxonomy in 2024 to guide Labuan financial institutions in aligning their activities with sustainability goals and ethical principles. Building on this progress, this year we issued a Circular on Carbon Credit Trading to guide stakeholders on possible structures and services to undertake such activities in Labuan IBFC.
12. To this effect, five RAMZ with 27 listings are valued at USD1.5 billion have been listed on Labuan digital exchanges to date. Most recently, Labuan IBFC was the platform for the world’s first Shariah-compliant climate sukuk.
13. These milestones open new opportunities for Labuan IBFC to advance a more inclusive and sustainable future, which leads us to the key questions: “Why are these actions necessary, and how can we build on them to create even greater impact?” Well, you will find the answers in today’s session, which will feature an introduction to the fundamentals of ESG and the UN’s 17 SDGs, their call to action and why ESG is now a key measure of long-term business success and how it can guide us in aligning strategies with sustainability goals.
14. The second session will delve deeper on embedding climate governance into financial sector. Truth be told, climate risk is no longer just an environmental issue, it has become a financial, operational and governance challenge. Understanding climate governance is therefore crucial in helping organisations manage systemic risks while keeping pace with regulatory, stakeholder, and societal expectations.
Distinguished Guests,
15. It is important to remember that adopting ESG practices goes beyond regulatory compliance - it calls for a genuine shift in mindset to uphold environmental stewardship, social responsibility, and sound governance. Therefore, I encourage everyone here today - colleagues and stakeholders alike to embrace this awareness programme as a meaningful opportunity for open dialogue. Let us move beyond conventional thinking, dismantle any silos, sharpen our knowledges and translate it into practices, while cultivating partnerships that create lasting value for our economy, society, and environment.
16. Together, we can embed sustainability not merely as a strategic goal, but as a shared principle guiding how we develop, invest, and grow. Thank you, and I look forward to an engaging and fruitful session ahead.
Wabillahi taufiq walhidayah, wassalamualaikum warahmatullahi wabarakatuh.
7. In conclusion, ESG is not just about compliance or marketing. It represents a comprehensive way of doing business that aligns profitability with broader social and environmental concerns. Companies that integrate ESG principles into their core strategies are likely to thrive in an increasingly complex global market while also contributing positively to the communities they serve and the environment they depend on.
8. On the national front, the ESG landscape has undergone a remarkable transformation, in the past two years. Regulatory frameworks have become more stringent, stakeholder expectations have risen sharply, and the government is actively driving momentum, urging businesses to accelerate their ESG adoption and alignment. The message is clear: sustainability is no longer optional; it is imperative.
9. We are witnessing a pivotal shift in Malaysia’s development agenda. Under the 12th Malaysia Plan, the Madani Government has embarked on bold structural reforms aimed at repositioning the nation for long-term resilience and sustainability. Key initiatives such as the Madani Economy Framework and the National Energy Transition Roadmap (NETR) reflect a clear and strategic commitment to building a future that is economically robust, socially inclusive, and environmentally responsible.
10. These are not just policy statements. The government is offering financial incentives, matching grants, and ESG implementation guides particularly for SMEs. These strategic actions position businesses as frontrunners in sustainability, contributing to a more resilient, future-ready economy, one that aligns with Malaysia’s national commitment to achieving net-zero emissions by 2050.
11. Labuan FSA recognises the global and national shift towards sustainable development and is proactively integrating sustainability into its core operations. Our sustainability journey began in 2022 with the Labuan IBFC Strategic Roadmap 2022-2026, which outlined initiatives to embed sustainability into the development of Labuan IBFC. A key focus has been Islamic finance, given its natural alignment responsible and ethical business practices. That same year, we launched the Islamic Digital Asset Centre (IDAC) to create a digital market ecosystem and promote sustainable investment environment through tokenisation of real-world assets. We have also introduced the Labuan IBFC Sustainability Taxonomy in 2024 to guide Labuan financial institutions in aligning their activities with sustainability goals and ethical principles. Building on this progress, this year we issued a Circular on Carbon Credit Trading to guide stakeholders on possible structures and services to undertake such activities in Labuan IBFC.
12. To this effect, five RAMZ with 27 listings are valued at USD1.5 billion have been listed on Labuan digital exchanges to date. Most recently, Labuan IBFC was the platform for the world’s first Shariah-compliant climate sukuk.
13. These milestones open new opportunities for Labuan IBFC to advance a more inclusive and sustainable future, which leads us to the key questions: “Why are these actions necessary, and how can we build on them to create even greater impact?” Well, you will find the answers in today’s session, which will feature an introduction to the fundamentals of ESG and the UN’s 17 SDGs, their call to action and why ESG is now a key measure of long-term business success and how it can guide us in aligning strategies with sustainability goals.
14. The second session will delve deeper on embedding climate governance into financial sector. Truth be told, climate risk is no longer just an environmental issue, it has become a financial, operational and governance challenge. Understanding climate governance is therefore crucial in helping organisations manage systemic risks while keeping pace with regulatory, stakeholder, and societal expectations.
Distinguished Guests,
15. It is important to remember that adopting ESG practices goes beyond regulatory compliance - it calls for a genuine shift in mindset to uphold environmental stewardship, social responsibility, and sound governance. Therefore, I encourage everyone here today - colleagues and stakeholders alike to embrace this awareness programme as a meaningful opportunity for open dialogue. Let us move beyond conventional thinking, dismantle any silos, sharpen our knowledges and translate it into practices, while cultivating partnerships that create lasting value for our economy, society, and environment.
16. Together, we can embed sustainability not merely as a strategic goal, but as a shared principle guiding how we develop, invest, and grow. Thank you, and I look forward to an engaging and fruitful session ahead.
Wabillahi taufiq walhidayah, wassalamualaikum warahmatullahi wabarakatuh.
Mr Affendi Rashdi
Director-General, Labuan FSA
