Labuan IBFC To Lead ESG, Shariah-compliant, Digital Finance Regionally -- Labuan FSA DG

By Jailani Hasan

LABUAN, Nov 28 (Bernama) -- Labuan International Business and Financial Centre (Labuan IBFC) is positioning itself as a regional hub for environmental, social, and governance (ESG)-aligned, Shariah-compliant and digitally driven financial solutions in full support of Malaysia’s sustainability agenda. 

Labuan Financial Services Authority (Labuan FSA) director-general Affendi Rashdi said Labuan IBFC’s direction is fully aligned with the nation’s advancing ESG landscape, particularly as the country progressively strengthens its sustainability and climate-related reporting framework via initiatives such as Bursa Malaysia’s enhanced disclosures and the Joint Committee on Climate Change (JC3) Climate Finance Innovation Lab.

“Labuan IBFC is fully aligned with this national vision,” he said when addressing the Labuan International Finance Lecture Series 2025 here today.

Affendi said the Labuan IBFC sustainability taxonomy (LiST), issued in July 2024, provides a structured classification of sustainable economic activities modelled after ASEAN and European Union taxonomies, enabling Labuan institutions to anchor their operations to internationally recognised ESG standards.

“Beyond reporting compliance, LiST is meant to build credibility, attract responsible capital and elevate Labuan’s global competitiveness,” he said.

Building on this direction, he said Labuan FSA introduced the Labuan IBFC for ESG initiative in January 2025, a regulator-industry collaborative platform focusing on three key pillars: innovative sustainable products, strengthened governance and risk oversight, and capacity-building for industry players.

Affendi said a natural extension of these efforts is the application of Islamic finance principles to generate tangible sustainability outcomes, an area where Labuan IBFC continues to demonstrate leadership.

He highlighted the world’s first RMB200 million (RM116.6 million) climate sukuk issued through Labuan IBFC, integrating Shariah principles with carbon-credit-linked assets and digital tokenisation mechanisms to generate verified carbon credits and fund ESG-certified projects.

“Building on this momentum, the Budget 2026 positions Labuan IBFC as a digital Islamic finance hub, including the introduction of a global tokenised sukuk initiative to enhance transparency and accessibility,” he said.

Affendi said these developments underline Labuan IBFC’s commitment to driving digital Islamic finance and sustainability-led innovation.

Touching on the Lecture Series, he said the annual event has long been a landmark platform in Labuan IBFC, bringing together industry minds to explore new ideas and innovations that support the IBFC’s next phase of development.

He said this year’s theme, “Synergising ESG, Islamic Finance and Digital Pathways for Labuan IBFC”, reflects a global financial environment in which sustainability imperatives, technological advancements, and ethical finance are converging.

“This convergence is reshaping capital allocation, risk assessment and long-term value creation, opening strategic opportunities for financial centres like Labuan IBFC,” he said, adding that today’s discussions serve as a timely platform to explore how these elements can be synergised for sustainable growth.

Affendi noted that as Labuan IBFC marks its 35th anniversary this year, the IBFC continues to transform from its early offshore origins into a recognised international financial hub capable of meeting investors’ expectations and navigating global financial disruptions.

“The future of finance is not only about innovation; it is about purpose -- aligning capital with conscience, growth with sustainability, and technology with trust,” he added. 

-- BERNAMA