Just over a year since announcing that it aimed to raise RM30 billion (US$6.6 billion) in sustainable finance by 2024, banking group CIMB is now doubling this targeted amount. The Southeast Asian bank reached its previous target two years ahead of schedule.
Speaking at the bank’s The Cooler Earth Summit on Tuesday, CIMB’s group chief executive officer Dato’ Abdul Rahman Ahmad highlighted notable transactions over the past year. This includes its facilitation of the dual tranche US$1.3 billion sukuk or Islamic bond offering by the Malaysia government in May, of which its US$800 million sustainability tranche was the world’s first US-dollar sustainability sukuk offered by a sovereign, he said.
CIMB has also mobilised RM1.2 billion (US$263.16 million dollars) worth of sustainability-linked financing for corporate clients across the region since 2020, he added.
“CIMB’s sustainable finance commitment includes, among others, green, social and sustainable, as well as sustainability-linked, retail, corporate and commercial financing, trade financing, debt and equity capital markets, wealth management and Treasury solutions,” the group said in a statement.
CIMB told Eco-Business that its solutions support a broad spectrum of client segments and comprises both an environmental and a social focus.
CIMB’s head of group sustainability Luanne Sieh shared on the sidelines of the summit that the figure was contributed to by both wholesale and retail banking products from across CIMB’s markets. The bank is the fifth largest financial institution in the Southeast Asia region.
Of the regions that have received the biggest share of sustainable finance, CIMB said that 75 per cent went to Malaysia, followed by 16 per cent for Indonesia. The remainder went to Singapore, Thailand and Cambodia in that order.
As part of the bank’s plans to deliver on its new sustainable finance target, CIMB launched its first Sustainable Term Investment Account-i in ASEAN, directed at the business community. Placements under the Account-i will be invested in Shariah-compliant investment portfolio, it said.
CIMB also said that its sustainable finance targets complement its broader sustainability commitments, which include a net-zero emissions target including Scope 3 financed emissions by 2050. To achieve this, the group outlined its interim targets, which include a recently developed baseline of its financed emissions from on-balance sheet financing.
“As of 2020, our financed emissions stood at around 9,200 kilo tonnes of carbon dioxide equivalent, covering 40 per cent of CIMB Group’s gross loan portfolio. For next year, we intend to augment and expand the scope of our baseline to cover the other main operating markets, sectors and asset classes,” group CEO Abdul Rahman said.
For a start, the group has set interim climate targets for two carbon intensive sectors, namely the coal mining and cement sectors. CIMB is committing to halving financing and investment exposure to the thermal coal mining sector by 2030, in line with its original promise to exit coal by 2040, Abdul Rahman said.
Within the cement sector, the banking group is committing to reduce its physical intensity by more than 35 per cent from 0.72 tonnes of carbon dioxide equivalent per tonne of cement produced in 2021 to 0.46 tonnes of carbon dioxide equivalent by 2030.
“We aim to add more sectoral targets progressively to cover all nine carbon-intensive sectors by 2024,” said Abdul Rahman.
The group has also developed an internal carbon pricing framework for their business units to factor into decision making and operations, he said at the Cooler Earth Summit.
Now in its fourth year, the summit convened industry stakeholders including policymakers, corporate leaders and businesses, non-governmental organisations, financiers and investors to deliberate on challenges, and accelerate the urgent actions required to shape a more sustainable future.
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