Contracts are not mere commercial transactions but are governance tools that safeguard environmental integrity and protect institutions from compliance risk, writes advocate & solicitor and ESG legal practitioner, Tan Poh Yee.

BANK LOAN decisions are not just financial transactions: they carry environmental consequences, influencing whether projects align with sustainability goals. Malaysia’s Paris Agreement 2015 pledge to cut greenhouse gas emissions is supported by domestic laws and regulations that ensure financing decisions contribute to those goals.

(Feature pic: CCPT principles and categories help banks ensure loans meet climate goals for projects across sectors from agriculture to steel.  | Image by YH Law)