Green Loan Provision and Reporting in Malaysia: A Fifteen-Year Analysis of Publicly Listed Banks
DOI:
https://doi.org/10.24191/jeeir.v14i2.9676Keywords:
banks, ESG, green finance, green loan, sustainable financeAbstract
As climate change emerges as a critical global challenge, governments and financial institutions worldwide pursue sustainable economic solutions. In Malaysia, public policies (i.e., Green Technology Financing Scheme, Bank Negara Malaysia’s Climate Change and Principle-based Taxonomy), have been introduced to embed sustainability into the financial system. Motivated by the need to understand the banking sector’s response to these policy shifts, this study investigates the evolution of green lending and its reporting in the annual reports of nine publicly listed banks in Malaysia (2010 – 2024). Using a descriptive research design, the study analyses manually extracted data from these reports to assess both the extent of green loan provision and how such loans are disclosed. The findings reveal a three-phase development in green lending: a dormant phase (2010–2013), an initial growth phase (2014–2018), and a phase of rapid acceleration and mainstreaming (2019–2024). Publicly listed banks were initially slow to engage in green lending but gained momentum over time. In terms of reporting, green loans were primarily reported in the Sustainability Statement, Management Discussion and Analysis, Bank’s Overview and CEO’s Statement. During the dormant phase, early adopters merely noted the approval of green loans without disclosing monetary values. In the growth phase, a greater number of banks reported actual green loan figures, and by the final phase, most banks had adopted this practice. Overall, the engagement and reporting trends reflect a growing institutional alignment with national environmental and sustainability priorities. The study contributes to the limited body of literature on green lending in emerging economies and offers valuable insights for policymakers, regulators, and investors seeking to assess the banking sector’s role in advancing Malaysia’s green transition.
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