(File pic) Finance Minister Lim Guan Eng said the fund is expected “to spur businesses to embark on green growth for sustainability and resilience, particularly in ensuring a balance between the nation’s current development needs and the need to protect its future resources”. (NSTP/ASWADI ALIAS)

A LESSER item within last week’s crowded news agenda was the government’s launch of a RM1 billion fund to support the nation’s sustainable development. The Sustainable Development Financing Fund (SDFF) is designed to encourage more companies to adopt sustainable practices in their business strategies, plans and programmes.

Bank Pembangunan Malaysia Bhd (BPMB) will provide subsidised financing (at an interest rate of just two per cent) to companies that demonstrate continuous contribution to the 17 sustainable development goals (SDGs). The SDGs are part of the 2030 Development Agenda of the United Nations, signed by heads of governments in 2015. It is a universal call to action to end poverty, protect the planet and ensure that everyone can enjoy peace and prosperity.

Finance Minister Lim Guan Eng said the fund is expected “to spur businesses to embark on green growth for sustainability and resilience, particularly in ensuring a balance between the nation’s current development needs and the need to protect its future resources”.

This, he added, would lead to strengthened food, water and energy security in the long term, lower environmental risks and ultimately better well-being and quality of life for all, in line with the primary aim of the UN 2030 Development Agenda.

However, it takes a lot of money to implement the programmes. UN sources estimate the cost of their implementation at RM20 trillion to RM24 trillion. Official development assistance (ODA) from industrialised countries today is around RM560 billion a year, leaving a yawning gap. Meeting the demands requires everyone to be on board and leveraging precious ODA resources to attract investors and other sources of funding, particularly from the private sector.

Malaysia is committed to supporting and implementing Agenda 2030 as sustainable development has been at the heart of the nation’s development approach since the 1970s, with an emphasis on eradicating poverty, providing universal access to education and caring for the environment. We are also prepared, as demonstrated above, to allocate our own financial resources to the cause. Not many developing countries can afford to do so. Malaysia has a good working relationship with the UNDP for many years and we have benefited from its assistance and cooperation in the past.

But while Malaysia has made progress on some SDGs (reducing poverty, decent work, economic growth, and industry innovation and infrastructure) we still need to pay attention to critical areas where progress seems to have stagnated. Among them is sustainable cities and communities. By 2030, the Malaysian population will be 80 per cent urban. We need to both green cities and make them more efficient, provide high-level services to the people with the help of smart communication devices and other high-tech tools. It will drive economic growth. The SDFF, hence, is timely.

Last year, Bank Negara deputy governor Jessica Chew said that while Malaysia made significant progress in the adoption of the SDGs under the national development agenda, the government’s effort alone was not sufficient. More needs to be done to reinvigorate the financial services to drive the SDGs. Therefore, the financial institutions’ progress in embracing sustainable principles in their business strategies could play an important catalytic role in the delivery of the SDGs.

Last year, the CIMB Group Holdings Bhd became the first bank in Asean to become a member of the United Nations Environment Finance Initiative (UNEP FI), which to date involves more than two dozen banks from five continents and 19 countries managing some US$16 trillion (RM66.12 trillion) in assets.

As a “student” of the UN and for someone who had been in the system, it is a source of pride for me to witness how a small country like Malaysia is punching well above its weight in addressing the universal call to action to protect the planet and ensure peace and prosperity for all.

Zakri Abdul Hamid is vice-chairman of the Governing Council of the UN Technology Bank for the Least Developed Countries in Gebze, Turkey.