Kota Kinabalu: Sabah reflects the kind of sustainable future many countries in the Asia-Pacific region aspire to achieve, combining rich natural capital, resilient communities and a strong indigenous heritage, said Securities Commission Malaysia (SC) Executive Chairman Datuk Mohammad Faiz Azmi.
He said sustainable development is ultimately about people and place, and Sabah offers a compelling example of how economic progress, environmental stewardship and community wellbeing can coexist.
“Every time I have the opportunity to visit Sabah, I am reminded that sustainable development is ultimately about people and place.
“Beyond its abundant natural capital and extraordinary biodiversity, what has impressed me is the warmth and resilience of your communities and the richness of your indigenous heritage.
“In many ways, Sabah reflects the future that much of our region seeks to build,” he said when opening the Sabah Asia-Pacific Impact Investing for Sustainable Development Summit 2026 at the Magellan Sutera Resort, here, recently.
Mohammad Faiz said the summit’s diverse participation underscored an important reality – sustainable development cannot be achieved by governments alone, but requires a whole-of-nation approach involving the private sector, civil society, communities and investors.
While ideas and innovation can inspire change, he said capital remains essential to scale solutions capable of addressing pressing social and environmental challenges.
“In the first half of this year alone, US$2.8 trillion in global mergers and acquisitions and mega initial public offerings were announced, mostly involving artificial intelligence and technology firms.
“The innovation is staggering, but the key question remains whether all this can translate into real and meaningful returns for communities and nations,” he said.
According to Mohammad Faiz, impact investing was created to address that challenge by generating both financial returns and measurable social and environmental outcomes.
He said demand for impact investing continues to grow across Asia, with 49pc of global investors surveyed indicating plans to increase their impact investment allocations in Southeast Asia.
“This is hardly surprising given that Asean is among the most climate-vulnerable regions in the world.
“The challenge is not merely about attracting and mobilising more capital. These investments must also deliver outcomes, both financial and social. No one is going to give capital away for free,” he said.
Mohammad Faiz said the Asia-Pacific region is expected to account for more than half of the estimated US$151 trillion in global infrastructure investment required over the next 25 years, underscoring the need for innovative financing models that strengthen resilience and improve quality of life.
He highlighted Malaysia’s experience in sustainable and impact-focused finance through the Islamic capital market, which shares many of the same principles as impact investing, including social responsibility, inclusiveness and equitable risk-sharing.
Among the notable examples, he cited the pioneering Sukuk Ihsan issued under the SC’s Sustainable and Responsible Investment (SRI) Framework in 2015 to improve educational outcomes in government schools.
More than 106,000 students across 11 states benefited from the programme, including those from five participating schools in Sabah.
He also highlighted Malaysia’s first green SRI Sukuk, which raised RM250 million to finance the construction of a large-scale solar photovoltaic plant in Kudat.
“The objective was to provide an environmentally friendly, clean and sustainable power supply for Sabah while building a lasting legacy for future generations.
“As we heard, there was a conscious decision not to rely on coal in order to preserve Sabah’s environment, and this Sukuk helped provide the financing for that,” he said.
Mohammad Faiz said the SC’s Capital Market Masterplan 2026-2030 places strong emphasis on social finance and sustainability, with an estimated RM90 billion to RM100 billion in sustainability-focused financing needed over the next five years.
He said innovative financing mechanisms, including Islamic social finance instruments such as waqf, zakat and sadaqah, could play a bigger role in supporting climate adaptation, community resilience and social protection projects.
The commission is also promoting a Social Exchange platform that connects donors, corporations and approved non-profit organisations to fund projects delivering measurable social and environmental outcomes.
Initially supporting charitable initiatives, the platform is expected to expand into impact-driven projects covering food security, healthcare, education, environmental conservation and opportunities for underserved communities.
Mohammad Faiz said climate adaptation remains a major financing challenge, as many projects struggle to attract funding despite their importance.
“Public financing alone is not sufficient. Many adaptation initiatives are difficult to bank because they do not generate conventional commercial returns.
“That is why we are exploring blended finance models that combine commercial, concessional and philanthropic capital to fund projects that protect communities from climate risks,” he said.
At the regional level, he said Asean capital market regulators are developing new frameworks to support climate adaptation financing and strengthen the voluntary carbon market ecosystem through improved governance, disclosure standards and project transparency.
He said these efforts would not only reinforce Malaysia’s position as a global leader in Islamic finance, but also support the continued growth of impact investing across the region.
