Resident Coordinator's speech: The SBTi and Climate Symposium - From Climate Pledges to Action

Yang Berhormat Nik Nazmi Nik Ahmad Minister of Natural Resources and Environmental Sustainability

Ms. Julie Amoroso Grabin, Regional Lead, UNFCCC/ RCC Asia and the Pacific

Mr Faroze Nadar, Executive Director, UN Global Compact, Malaysia & Brunei Chapter

Ladies and gentlemen,

It is a genuine honour to speak at this event convened by the UN Global Compact Network for Malaysia and Brunei. 

Today we address what is perhaps the most pressing challenge of our times, that of halting accelerating climate change. This is an issue with global, regional and national impacts; and it is one that threatens our environments, our economies, our societies, and ultimately, our very existence. 

Climate change is a challenge which the world is currently failing to address effectively. Businesses, the world over, have both a direct stake and a significant role in delivering durable solutions.

I have three sets of messages to convey. I begin with a quick progress review of SDG 13, the climate change goal, and share some data which underline the severity of the situation.  Second, I set out key urgent actions that the UN is advocating for, to both halt climate change and mitigate its existing impacts. Third, I come to Malaysia, to set out key directions for businesses, and offer some policy steers for Government. 

At the global level, all the evidence and analysis point to the 1.5 degree increase in average temperatures enshrined in the Paris Agreement, as hanging by a thread. 

The data is unambiguous. Drawing on the UN’s SDG Progress Report for 2023, for the world as whole, none of targets within SDG 13 are on-track to be met by 2030; some 60 per cent are lagging; 20 per cent show regression on the 2015 starting point; and the final 20 per cent lack sufficient data to make a judgment either way. 

For Asia Pacific, newly published data for 2024 paints a bleak picture. Overall, progress on SDG 13 shows regression on 2015, and while there has been improvement over 2023, none of the targets are on track; some 20 per cent are assessed as lagging; 20 per cent have regressed; and a striking 60 per cent lack sufficient data. 

This is far from ideal for a region which has traditionally performed well developmentally.  Progress on de-carbonization is still very weak, and Asia-Pacific now accounts for 95 per cent of newly planned coalfired power production.  

For Malaysia, performance is better, but there are several major issues. Analysis undertaken by my office last year found that one third of SDG13 targets are on track, and two-thirds are unlikely to be met by 2030. While awareness and capacity are improving, and the policy response has begun to kick-in, several major metrics – carbon emissions and the impacts of climate related events - continue to worsen.

In sum, the salient facts are now clear. Climate change is real and accelerating, and it is driven by human activity. The impacts of unchecked global warming will be enormous and Malaysia will not be spared. 

To quote the UN General Secretary, unlike the last global extinction event, we are both the dinosaurs and the meteor, we are both the threatened and the threat. 

This brings me to my second set of messages – There are solutions to prevent such a cataclysm and today is an opportunity to call for urgent and collective actions.

Foremost, we need very deep cuts in emissions. 1.5 per cent is more a limit than a target; it is a tipping point that would likely result in the melting of the great ice sheets, catastrophic rises in sea levels, and the collapse of major climate regulating sea currents. The economic and social knock-on effects of these events are incalculable.

Avoiding this necessitates radical changes in the energy mix, the complete phase out of fossil fuels, alongside rapid growth in renewables, dramatic improvements in energy efficiency and changes in producer and consumer behaviours. While this will be disruptive for both business and consumers, there are also major opportunities to be realized, including commercial ones.  

The meta-level vehicle for delivering emissions reductions remains the system of Nationally Determined Contributions (NDCs). These will be revisited next year following the Global Stocktake. While greater reductions should be borne by the World’s leading emitters, all countries and all sectors must now contribute, and reductions must include all greenhouse gases. Given where we are, this will require aggregate emissions reductions of 9 per cent every year until 2030. 

Second, we need to meet the costs, but also share the burdens. This requires increased public and private finance to enable investment and delivery of greater technological innovations.  

The likely costs of transition are sizeable, and financing must be centre-stage. Efforts to deliver higher levels of ODA for developing countries must be redoubled.  Equally, greater private sector flows and new financing instruments are essential. In turn, Governments must provide unambiguous policy signals to ensure the stability and security that investors require. 

Specific measures include the ending of fossil fuel subsidies, and the pricing of carbon, either via taxes or mandatory trading regimes. While not a silver bullet, technology can also make a major contribution. New thinking is needed on how we harness and share technologies and the know-how to transform production processes. This includes the enhancement of carbon capture and storage and making these techniques available to all countries. 

Third, natural ecosystems - oceans, wetlands, and forests - absorb vast quantities of carbon, and through optimization, have the potential to absorb still more. Urgent efforts are needed to preserve and expand these carbon sinks, and in turn to protect them from biodiversity loss and pollution. 

Fourth, I underline the importance of equity within countries - between groups and areas, and crucially for this audience, between economic sectors, and large versus small enterprises. This applies to all the dimensions that I have listed: ensuring fairness in the allocation of emissions reductions targets; expanding the availability of financing; making available proprietary and other technologies; and recognizing the contribution of remote, often indigenous communities by way of their stewardship of natural ecosystems. 

Finally, I come to Malaysia. I have four key messages, two for the business community here today, and recognizing the presence and leadership of the honourable minister, two further messages for Government.

Echoing the absolute need for rapid reductions in emissions, we need to see a step change away from fossil fuels, including the complete phase out of coal, and further growth in renewables. While recognizing the challenges for certain sectors, the trajectory is clear; renewables, especially on- and off-shore wind, and solar generation, already produce far cheaper energy; and with the pricing of carbon, fossil fuel investments will become stranded assets. Diversification, renewal, and progressive disinvestment are vital. Encouragingly this is already underway in Malaysia. We are seeing the rapid growth of greener forms of power production.     

Emissions reductions must apply to all enterprises. As noted, this is not merely good for climate change but also positive for businesses’ bottom lines. And here I recognize the tangible contribution of the Global Compact. Enabling company-level transitions, via initiatives like the SBTi, and Faster Forward, can deliver substantial value-added.

My second message to business concerns the pivotal issue of financing. I refer here both to the quantum of funds available for businesses, and the types of financing instruments. Malaysia has successfully developed deep and liquid capital markets, and in recent years, Bank Negara, the Government, and the Securities Commission have facilitated new green investment channels. It is imperative that the finance sector builds upon and leverages these comparative advantage and initiatives, and that businesses take up financing opportunities. 

Yet again, I underline that this makes both climate sense and business sense - delivering enhanced returns to the providers of capital, while also ensuring more secure finance at lower cost, to the users of capital.

I come now to the Government, and first, its leadership role. I commend several major positive steps, not least the adoption of the National Energy Transition Roadmap and other frameworks, and the firm commitments to reduce carbon emissions by 45% by 2030, and to achieve net zero by 2050. 

It is vital that these plans and commitments are now consolidated. This could begin with an enhanced NDC offer ahead of COP30 in 2030, followed by a package of supporting incentives and initiatives. In the language of economics, it is important to “get the key prices right”, specifically by progressively ending fossil fuel subsidies and placing a price on carbon. 

Importantly, Government also needs to actively manage and smooth the transition, by compensating those most affected but least able to bear the burden of fiscal changes, and by facilitating greener forms of production and consumption.  

My second message to Government is the absolute centrality of building a partnership between all stakeholders - government, civil society, business, and citizens. Indeed, the scale of the transition implies the need for a new climate-based social contract.  

In the Malaysian context the forthcoming Climate Change Bill provides an opportunity for achieving this - by allowing for the institutionalization of targets and delivery mechanisms, and the gaining of popular consent. 

Very finally, these efforts can also have impacts beyond Malaysia’s shores - providing an exemplar governance model for enabling pathbreaking climate action at national level. Malaysia’s forthcoming chairmanship of ASEAN in 2025 provides an ideal vehicle for showcasing this experience, and initially delivering regional, and later via participation in UN-events, global reach. 

I am encouraged by the level of participation shown by the business community today. I thank you for your attention and renew my appreciation to UNGCMY for the opportunity to speak at this very timely event.

Thank you.