Lack of resources hinder ESG transition among industry players

by ASILA JALIL / pic by TMR FILE 

SOME industry players might be lacking resources to embark on a sustainability journey amid a growing emphasis on the environmental, social and governance (ESG) agenda.

Malayan Banking Bhd (Maybank) group president and CEO Datuk Abdul Farid Alias said vested parties and industry players would need to seek the best formula for such companies to help them navigate towards ESG goals.

He said there is a small group of customers that might not be able to comply with the group’s sustainability agenda due to lack of resources.

“We need to find the right transition instead of dropping them like a brick. That is not right. I believe the reason why they cannot do it on their own is because of a lack of resources.

“This is perhaps something that a group of people or associations within the industry can help by looking at these groups of customers going forward,” Abdul Farid said in a media briefing during Maybank’s Sustainability Day on Monday.

He said more industry players in the “less green” sectors in terms of their operations, mainly in the oil and gas, mining and plantation, are acknowledging the need to transform to be more sustainable as ESG practices are pushed to the forefront.

“I explained to them that our approach focuses on transition. We need to balance growth versus environmental factors and make the right decision in helping society to progress going forward in the most responsible manner,” he said.

Maybank’s long-term sustainability commitments are designed to propel the group’s growth and strengthen its position towards becoming a regional ESG leader by 2025.

The country’s largest bank by market capitalisation and total assets is committed to provide RM50 billion in sustainable financing by 2025.

He said this includes direct lending or investment, and services related to arranging, syndicating, fundraising or underwriting and advisory — all of which will integrate ESG criteria.

Other commitments include improving the lives of one million households in Asean and achieving a million hours per annum on sustainability activities, and delivering one thousand significant United Nations’ Sustainable Development Goals-related outcomes by 2025.

It also has plans to achieve a carbon-neutral position for Scope One and Two emissions by 2030 and a net-zero carbon equivalent position by 2050.

These long-term commitments are part of the sustainability strategic priority under the group’s M25 Plan.

The bank will focus on achieving sustainable growth by enabling a responsible transition to a low carbon economy while empowering communities and leading by example with good governance practices.

Maybank has decided to no longer finance new coal activities and focused on eliminating deforestation activities, particularly those done at prime forests.

Abdul Farid said the bank would not get involved in activities that reduce the forest number via deforestation for property developments, construction or others.

“If there are activities with respect to timber and logging, it has to be done on a sustainable basis. We are learning better because this whole sustainable area is very complex. It is not just coal, fossil fuels, deforestation or agriculture,” he added.

Group chief risk officer Gilbert Kohnke said Maybank’s sustainability commitments are guided by a comprehensive risk management approach, including identifying material high ESG risk sectors, implementing industry-specific ESG criteria, and establishing risk assessment criteria for all sectors.

He said the bank’s ESG deliverables follow through years of journey including the “No Deforestation, No New Peat and No Exploitation” commitments.