by TMR

BURSA Malaysia Bhd and CIMB Group Holdings Bhd entered into a memorandum of understanding (MoU) to accelerate the adoption of environmental, social and governance (ESG) practices among Malaysian public-listed companies (PLCs) through the #financing4ESG initiative.

Through this MoU, CIMB will become the first home-grown bank to collaborate with Bursa Malaysia on #financing4ESG.

Under the MoU, CIMB will collaborate with Bursa Malaysia to offer sustainable finance offerings for Malaysian PLCs in alignment with the ratings model of the FTSE4Good Bursa Malaysia (F4GBM) index. 

The collaboration aims to help Malaysian PLCs improve their sustainability performance and ratings for inclusion into the index, and at the same time support their transition towards more sustainable business practices through various Green, Social, Sustainable Impact Products and Services (GSSIPS) offered by the group.

As part of the collaboration, Bursa Malaysia will also coordinate joint engagement and onboarding sessions for eligible PLCs together with CIMB on the F4GBM framework, as well as the group’s solutions under its GSSIPS framework. 

These solutions may include CIMB’s existing ESG offerings such a sustainability-linked loans and sustainability-linked treasury solutions for corporate clients, which encourage sustainable practices by providing financial incentives to the clients based on their achievement of pre-agreed sustainability performance targets (SPTs).

CIMB may also reference the F4GBM framework and ratings model in structuring sustainability-linked transactions with the relevant SPTs for corporates that seek to raise financing or enter into a derivative transaction whilst also strengthening their ESG adoption.

“As ESG compliance and disclosure have become a global demand, we are pleased to have CIMB together with us on our journey to enable Malaysian PLCs to become regional leaders in the ESG space,” said Bursa Malaysia CEO Datuk Muhamad Umar Swift (picture).

CIMB group CEO Datuk Abdul Rahman Ahmad said it is critical for the financial sector to encourage ESG adoption within the corporate sector through sustainable finance.

“This will help to enhance the long-term resilience and competitiveness of Malaysian businesses and at the same time support the transition towards a net-zero economy. This strategic collaboration is firmly in line with CIMB’s sustainability agenda under our Forward23+ strategic plan,” he added.

PLCs interested in learning more about the initiative or improving their general ESG practices may contact Bursa Malaysia’s index and sustainable business unit via email at [email protected].