Climate and Environmental Governance: Just resilience test for National Adaptation Plan

This article first appeared in Forum, The Edge Malaysia Weekly on August 3, 2026 - August 9, 2026

Floods have accounted for 85% of all natural disasters in Malaysia since 2000, but the frequency per year is growing, and so too are the financial costs. Estimates from the Department of Statistics Malaysia suggest that annual flood losses have risen steadily from RM622 million in 2022 to RM933 million in 2024.

There is an urgent need to build adaptive capacity and invest in resilience through a people-centric lens.

Malaysia is currently developing its National Adaptation Plan (NAP). In this process, it is important to prioritise the people most exposed to climate risk. This refers to “just resilience” and it is the lens the NAP needs at the heart of its design.

Climate impacts fall hardest on vulnerable groups, lower-income households, informal and migrant workers and marginalised communities. High social vulnerabilities such as inequality, weak safety nets and unstable employment amplify those impacts. Without integrating both physical and social dimensions, efforts to reduce risk in one place can simply displace it to another.

Resilience must therefore be designed at both the asset and community levels and integrated systemically.

Just resilience as a material issue

Physical risks are costly systemic risks that will only compound with worsening climate impacts. Institutional investors in the Asia Investor Group on Climate Change’s (AIGCC) network see both physical climate risk and just transition as increasingly material issues that would detrimentally affect businesses and economies if not managed properly.

For example, climate hazards are already costing Asia’s major electricity utilities US$6.3 billion (RM25.77 billion) annually in asset damage and lost revenue, and these costs will increase by 33% by 2050 — US$8.4 billion annually — under a medium-high warming trajectory if adaptation measures are not put in place.

Beyond the direct costs to utilities, disruptions to electricity generation due to climate hazards can cascade across supply chains and risk imposing costs on businesses and communities that depend on reliable and affordable energy supply.

The World Bank further estimates that Malaysia had lost around RM27.8 billion of gross domestic product between 2015 and 2024 due to the impacts of floods on business revenues and labour productivity. And, projecting ahead to 2050, heat stress could lead to annual productivity losses of 5% in the agriculture sector, 2% in the industrial sector, and 1.5% in the services sector, relative to today’s baseline.

Resilient and productive economies are key to investors’ ability to generate returns for their stakeholders. However, unpredictable disruptions in asset- and workforce-level productivity due to climate hazards undermine this.

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