CIMB Group Holdings Bhd has become the first banking group in Malaysia and the first in Southeast Asia to commit to phasing out coal from its portfolio by 2040.
This follows the strengthening of its commitments towards sustainable finance and climate action through positive impact finance and the introduction of its first Coal Sector Guide – the latest milestone in CIMB’s sustainability journey.
In development since November 2019 with extensive benchmarking and engagement with business units across the region and in consultation with non-governmental organisations (NGOs), the guide sets out CIMB’s commitment to phase out coal from its portfolio by 2040 as part of its effort to align with the 1.5°C goal of the Paris Climate Agreement.
Effective in phases next year across CIMB’s operating markets, the guide prohibits asset-level or general corporate financing for new thermal coal mines and coal-fired power plants as well as expansions except where there is an existing commitment.
In addition, it sets out the expectation for companies such as electricity utilities that rely on coal as a fuel source to provide a diversification strategy to reduce the share of coal in their power mix.
This move is in support of Bank Negara Malaysia’s agenda to build climate resilience within the Malaysian financial sector and its work around the Joint Committee on Climate Change (JC3), the Value-based Intermediation Financing and Investment Impact Assessment Framework (VBIAF) and the forthcoming Climate Change and Principles-based Taxonomy.
“As a founding member of the United Nations Environment Programme Finance Initiative Principles for Responsible Banking and in line with the Collective Commitment to Climate Action, CIMB firmly believes that profit and purpose are inextricably linked,” opined CIMB Group chairman Datuk Mohd Nasir Ahmad.
“As such, we are working towards announcing more sustainability-related measures, in particular with respect to our positive impact financing target, as we continue to address climate change and the other pressing issues facing society today.”
Earlier this year, CIMB was one of the first banks in Malaysia to announce its sustainability-linked loan (SLL) offerings, having committed RM3 bil to SLLs for corporate borrowers through 2024. – Dec 8, 2020
