CIMB to mobilise RM30b for sustainable finance

CIMB has made good progress and is ahead of schedule in meeting its original target with over RM10b in offerings under its GSSIPS framework already achieved as of 2021

by PRIYA VASU / Pic by TMR FILE PIX

CIMB Group Holdings Bhd will mobilise RM30 billion towards sustainable finance as part of its ambition to be an Asean sustainability leader by 2024.

In a statement yesterday, the banking group stated that it was guided by its Green, Social, Sustainable Impact Products and Services (GSSIPS) framework and this higher sustainability finance target includes wholesale and commercial financing, bonds and intermediation, wealth products, and products that enable financial inclusion such as affordable home financing and other products catered to the bottom 40% group.

“CIMB has made good progress and is ahead of schedule in meeting its original target with over RM10 billion in offerings under its GSSIPS framework already achieved as of 2021,” the bank noted in its release.

The group also announced its commitments towards mitigating climate change, including net zero operational greenhouse gas scope 1 and 2 emissions by 2030 and net zero overall greenhouse gas emissions by 2050, together with a No Deforestation, No Peat, No Exploitation commitment.

“The Covid-19 pandemic has been a global stress test, worsened further by the increasing occurrences of extreme weather events driven by climate change. These have had a deep impact on lives and livelihoods, emphasising the urgency for all stakeholders in the public and private sectors and civil society to accelerate sustainable action towards a just transition to a low carbon economy in a measurable and timely manner,” its group CEO Datuk Abdul Rahman Ahmad said.

To provide greater oversight and accountability in delivering on these commitments, CIMB’s board of directors have established a group sustainability and governance committee, chaired by Teoh Su Yin as senior independent director.

Under its Forward23+ Strategic Plan, the banking group has set a target to be in the top quartile of the Dow Jones Sustainability Index (DJSI) by 2024.

The DJSI tracks the performance of the world’s leading companies in terms of their sustainability practices, and to date CIMB has improved its position from the 19th percentile in 2018 to 65th percentile in 2020.

The commitments announced at CIMB’s Sustainability Investor Day represent a continuation of the group’s ongoing journey towards being a sustainability leader in the region since starting its sustainability journey 2019.

CIMB is a founding signatory of the United Nations Environment Programme Finance Initiative Principles for Responsible Banking, a signatory of the Collective Commitment on Climate Action and the Net-Zero Banking Alliance, as well as an official supporter of the Task Force on Climate-related Financial Disclosures.

In 2019, CIMB introduced its Group Sustainable Financing Policy and in 2020, the group introduced its coal sector guide which sets out CIMB’s commitment to phase out coal from its portfolio by 2040 in line with the 1.5oC goal of the Paris Climate Agreement.

With the issuance of the coal sector guide, CIMB became the first banking group in Malaysia and the first in South-East Asia to commit to phasing out coal from its portfolio.

“As part of its sustainable finance commitment, CIMB has been active in providing sustainability linked loans for corporate clients, with close to RM1 billion already committed out of RM3 billion earmarked through 2024,” Abdul Rahman added.

In the first half of 2021, CIMB acted as the lead manager for the Malaysian government’s dual tranche US$1.3 billion (RM5.45 billion) Sukuk Wakala offering, of which US$800 million sustainability tranche was the world’s first US dollar sustainability sukuk offered by a sovereign.

CIMB also launched and priced the government of Indonesia’s US$3 billion global sukuk offering, including a US$750 million green sukuk tranche.

CIMB is also in the process of finalising its internal framework for the identification and classification of climate-aligned assets, economic activities and environmental, social, and governance criteria that is grounded in the group’s GSSIPS framework and Bank Negara Malaysia’s Climate Change and Principle-based Taxonomy.

“This internal framework will allow CIMB to assess, monitor and the increase in its exposure to green, social and sustainable assets in a more holistic and targeted manner in the next few years,” said Abdul Rahman.