Open Letter to Bank Negara Malaysia, the Securities Commission Malaysia, and Financial Institutions
To:
- Governor, Bank Negara Malaysia
- Chairman, Securities Commission Malaysia
- Chairman and members, Shariah Advisory Council of Bank Negara Malaysia
- Chairman and members, Shariah Advisory Council of the Securities Commission Malaysia
- Leaders of Malaysia’s financial institutions
Dear Governor, Chairman, members of the Shariah Advisory Councils, and leaders of Malaysia’s financial institutions,
Capital flows are an ethical and public health decision
The decision on the allocation and flow of capital is both an ethical and a public health decision, with far-reaching implications on the lives of people not just in Malaysia, but those suffering in other continents. As the global leader in Islamic finance, Malaysia carries a duty under the Maqasid al-Shariah: to act as stewards (khalifah) of the earth (Al-Baqarah 2:30), to uphold the balance (mizan) (Ar-Rahman 55:7-9), and to not cause corruption on the earth after it has been set in order (Al-A’raf 7:56). Financing what harms life and the earth goes against that duty.
We have felt this with every breath this past month. On 4 September 2026, Serian in Sarawak hit an API of 521, triggering a haze emergency (The Star), and by 30 September Klang and Kuala Lumpur were still at 163 and 166 (Malay Mail). The haze comes mostly from fires, but it is measured in PM2.5, the same pollution coal plants release every single day.
Coal Harms Public Health at Every Stage
Fossil fuels, more specifically coal, have clear and detrimental public health impacts. Coal made up for 43.1% of Malaysia’s electricity generation in 2024 (International Energy Agency), more than 1000% increase from 2000. And the Global Carbon Budget 2025 states that coal is also the largest single source of carbon dioxide emissions, making up 42% of global fossil CO₂ in 2025 and 46% of all fossil CO₂ emitted since the beginning of the industrial era.
Coal harms public health at every stage of its life cycle – burning it for electricity releases more nitrogen oxides, sulfur dioxide, particulate matter and heavy metals per unit of energy than any other fuel (Hendryx et al., 2020). Fine particulate pollution from coal plants carries more than twice the mortality risk of PM2.5 from other sources (Henneman et al., 2023), that’s the same PM2.5 we are tracking for our current Transboundary Haze crisis. These burdens fall hardest on low-income communities, and the evidence shows that stopping coal emissions saves lives.
The World is asking Finance to Move
At the UN Climate Summit on 23 September 2026, Secretary-General António Guterres called for the overall global climate finance to reach $1.3 trillion annually by 2035, and to “match the revolution in energy with a revolution in finance” – finance needed by countries in our region to deal with unavoidable climate and environmental impacts. This came with a call to protect the foundations of climate action: science and truth, international law and cooperation. The International Court of Justice’s 2025 advisory opinion has confirmed that states must protect the climate system, including by regulating private actors as a matter of due diligence.
Why Our Campaign Exists
We acknowledge progress made – no new coal fired power plants, a 2044 coal phase-out target, bank exits from new coal, taxonomies, the National Sustainability Reporting Framework, and maqasid-based guidance for Islamic Finance. However, being compliant is not the same as ending and preventing harm. The gaps that we have identified:
- The coal phase-out is slow and not binding – It relies on contracts expiring naturally, and with 2 more decades of coal pollution from today, coal is being replaced by gas, not clean energy.
- Commitments cover new coal, not existing exposure and financing – Banks like Maybank have committed to stop new coal financing, but existing exposure and financing continues, and our taxonomies are kind on coal. The ASEAN Taxonomy only labels coal phase-out finance green if plants retire by 2040, and our 2044 exit misses that mark. Without strict criteria, “transition” labels risk rewarding plants for simply running out their contracts.
- Islamic Finance excludes tobacco, but not coal despite coal’s well-documented harm to life.
- Reporting is not the same as respecting human rights – the ISSB standards behind the NSRF are catered to investors and omit human rights, risking “accountability-washing”.
- Screening is failing on humanitarian law – PNB is the largest shareholder of Sime Darby, Caterpillar’s regional distributor. Its D9 bulldozers have been used to demolish Palestinian homes, based on the UN report on corporate complicity, after which the UN Commission of Inquiry found that Israel has committed genocide in Gaza.
- Screening has not caught up with critical minerals
Our Key Demands
DIvesting from coal is not only an ethical and health imperative – it is the global financially smart move. Renewables are the cheapest forms of energy, and the precedent already exists – Islamic finance excluded tobacco once its harms were established.
To Bank Negara Malaysia and the Securities Commission Malaysia:
- Exclude coal from the Malaysia Taxonomies
- Refer coal to the Shariah Advisory Councils for exclusion under the Maqasid al-Shariah, with narrow, time-bound exceptions tied to exit plans.
- Require coal run-off plans with dates, disclosure of coal exposure, and higher risk weights for coal-linked assets.
- Make human rights due diligence mandatory, in line with the UN Guiding Principles on Business and Human Rights – across supply chains and end-use, before financing and throughout the financing life cycle.
To banks, asset managers, takaful operators, investors:
- End all coal financing, not only new projects – publish an exit date well ahead of 2044.
- Replace coal with clean energy, not gas. Move capital into renewables.
- Fund a just, peaceful, and rights-respecting energy transition – scale green sukuk and blended finance for renewables, with human rights safeguards across supply chains.
- Protect workers and communities – make retraining, livelihoods, and affordable energy conditions of any coal exit.
- Transparency and accountability – disclose explicitly coal exposure and progress every year.
- Review existing holdings against international law – starting with PNB, review exposure to companies named by UN bodies for complicity in grave violations of international humanitarian and human rights law, and use shareholder influence to end those ties.
Leading by Example
As the global leader in Islamic Finance, it is not enough to be merely compliant – we need to truly champion the values of the Maqasid al-Shariah, above all the hifz al-nafs, the protection of life.
