KUALA LUMPUR (Oct 3): Bank Negara Malaysia (BNM) has published two new tools today for public consultation, namely the value based intermediation (VBI) assessment framework and the VBI scorecard.

BNM Governor Datuk Nor Shamsiah Mohd Yunus said these tools will support important changes to the way financial institutions make decisions, and to the characteristics of banking and takaful portfolios.

"The assessment framework provides guidance on the assessment of financing and investment applications taking into consideration economic, social and environmental impacts, while the scorecard supports the implementation of performance measurement frameworks for Islamic financial institutions that drive positive value and impact on society and the environment," she said in her keynote address at the opening of the Global Islamic Finance Forum 2018 here today.

"I look forward to receiving constructive feedback from the industry and interested parties, and to further strengthen these frameworks to drive a renewed focus on sustainable financial solutions," she added.

The governor also touched on the re-thinking of risk by Islamic financial institutions.

"Non-traditional forms of risks such as social, political and environmental risks are business threats that simply cannot be ignored. Research indicates that there are material benefits to managing these risks more proactively. An International Finance Corp survey of global banks showed that around 86% of respondents which integrated social and environmental risks in their business have yielded positive business results.

"There are also growing calls by shareholders for financial institutions to play a more proactive role in the sustainability agenda," she said.

Nor Shamsiah is hopeful that these discussions and practical applications will bring about a powerful change in Islamic finance, one that will see shariah-based principles as part of the norm, and demanded by investors and customers alike.

Malaysia continues to be the main driver for the sukuk market, representing 51% of the US$396 billion total global outstanding sukuk last year.

In July 2017, the country launched the world's first 'green' Sustainable and Responsible Investment Sukuk by Tadau Energy of Malaysia. To date, Malaysian corporates have issued RM3.7 billion worth of green sukuk.