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Malaysia has been grappling with the challenge of floods, which account for 85% of natural disasters in the country since 2000. The threat of flooding is expected to worsen, potentially costing up to 4.1% of Malaysia's GDP in 2030 and increasing unemployment rates. Reference
In response to this growing threat, the British High Commission in Kuala Lumpur hosted a roundtable event to discuss effective flood management and responses in cities, with support from partners including Climate Governance Malaysia (CGM) and Universiti Kebangsaan Malaysia’s Southeast Asia Disaster Prevention Research Initiative (SEADPRI). Over 60 experts from various sectors in both the UK and Malaysia participated in the forum.
The event opened with remarks from the Minister of Housing and Local Government, YB Tuan Nga Kor Ming and British High Commissioner to Malaysia, Her Excellency Ailsa Terry, setting a tone of urgency and cooperation. UK-supported science and innovation projects were showcased, along with insightful panel dialogues that delved into the complexities of flood risk management in Malaysia and the UK. One of the key resources shared was a recent study by World Bank and Bank Negara Malaysia, shedding light on the economy impact and risks of flood on Malaysian businesses.
Building on insights from the study, Datin Seri Sunita Rajakumar, CGM Chairperson led on a panel to discuss financing mechanisms for sustainable and resilient city initiatives for effective flood management. The discussion highlighted the importance of innovative financing, public-private partnerships, and investment in green infrastructure to bridge the funding gap in adaptation efforts.
To summarise some of the key takeaways:
Katie Lee Sheah Tsan, Climate Policy Strategist from Bank Negara Malaysia (BNM) discussed financial policies for flood resilience.
The interdisciplinary nature of climate change emphasised the importance to equip the financial sector with the language and tools of climate science, focusing on integration of climate risks into financial decision-making processes.
BNM’s Climate Change and Principle-based Taxonomy, climate risk stress testing and green incentives programmes are important initiatives to help address some of these challenges. BNM is also exploring innovative models such as flood parametric solutions, to enhance flood risks and impact assessment.
With increasing global ESG regulations, public and private sectors will have to work together in implementing effective resilience measures. Initiatives like the Joint Climate Change Committee (JC3) facilitate dialogue and improve data flow. Resilient measures are extremely powerful, businesses need to incorporate these measures now and it will lead to multiplier effect in reducing climate impact on the wider economy.
Teresa Wong, Chief Risk Officer/Head of Sustainability Risk from Zurich General Insurance/Zurich Malaysia, highlighted the role of insurance industry in flood management.
With only one-third of potential damages being insured during the 2021 floods in Malaysia, this emphasised the need for broader coverage that includes both commercial and household perspectives.
Given the practice of seeding reinsurance offshore, it is important for firms to develop financial strategies aimed at managing risk exposure. There is potential for wider utilisation of Sukuk/Bond instruments to support climate adaptation projects.
Currently observed a lack of data integration between insured losses and banks financial recoverability post-disaster, there is a need to advocate for data modelling to assess climate resilience in a more holistic manner across the financial sector.
To help build flood resilience, Zurich Foundation recently initiated programmes in partnership with Kuala Lumpur and Melaka City, to assess community resilience against flood impact and build capacity on climate resilience.
Nurul Diana Intan Zarifah, Head of Risk from Cyberview Malaysia shared insights on smart city solutions for sustainability.
Sustainable urban planning such as the use of detention ponds for flood mitigation, green buildings or other interventions could help increase resilience and reduce risks of natural disasters in urban environments.
There are limited financing options among property developers or industry players, there is a need to demonstrate impact of sustainability to attract innovative financing and partnerships
Cyberview champions various sustainability initiatives as part of Cyberjaya’s Low Carbon City Framework. They highlighted the benefits of soft power approach to climate action and importance of integrating sustainability outcomes in city planning and development. These efforts have helped reduced the risk of flood or climate events in the city.
Anita Ahmad, Chief Executive Officer from Yayasan MySDG emphasised the importance of community-led initiatives.
There is significance in supporting community-led solutions to climate resilience, targeting the most vulnerable populations, including those in the informal sector and non-Malaysians contributing to the economy.
Pointed out the difficulties in obtaining reliable data on flood impacts and the need for more unrestricted funding to allow organisations to be adaptive in their resilience-building efforts for long term impact.
Yayasan MySDG is exploring innovative funding avenues such as Islamic social financing to support community-based solutions like sustainable farming, land management, and early warning systems. They emphasise the need for collaborative efforts, avoiding silos, and pooling resources for greater impact.
[Further insights from Anita Ahmad is summarised here.]
Dwi Rahardiani, Country Manager from Oxford Policy Management (OPM) Indonesia, offered a regional perspective on adaptation strategies.
Drawing on interim findings from UK FCDO-commissioned research to assess private financing opportunities for climate adaptation, Dwi noted the global shortfall in private sector funding for climate adaptation, emphasising the need for enabling policies, regulatory environments, and economic incentives to attract private investment.
Case studies and capacity building are essential tools in improving the supply of viable green projects and enhancing the ability of SMEs to adapt to climate risks.
She highlighted the potential for financial mechanisms like catastrophe bonds to support flood management, and the importance of an integrated approach involving public, private, community, and academic sectors to enhance climate resilience and adaptation
These takeaways highlight the complex interplay between policy, finance, insurance, urban planning, and community engagement in addressing flood resilience. The speakers collectively emphasise the importance of innovative financing, the expansion of insurance coverage, sustainable urban development practices, data collection for informed decision-making, and the vital role of community-led initiatives in enhancing flood resilience in Malaysia.
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