PETALING JAYA: CIMB Bank Bhd and CIMB Islamic Bank Bhd have enhanced their GreenBizReady proposition with the launch of a sustainability-linked financing (SLF) programme for SMEs.
CIMB is the first bank in the market to offer a value proposition for small and medium enterprises to tap into sustainability-linked financing opportunities, including simple tools for measurement and verification.
The SLF programme, which has an allocation of RM3 billion through 2030, aims to incentivise SMEs to achieve credible greenhouse gas (GHG) emission reduction targets through attractive financing rebates of up to 0.50% per annum, as they secure financing to meet their capital or expansion needs.
Once sustainability performance targets have been agreed with CIMB, SMEs only need to input data such as energy and fuel consumption into Malaysian Green Technology and Climate Change Corporation’s (MGTC) Low Carbon Operating System web-based platform.
Additionally, by combining the SLF programme with Bank Negara Malaysia’s Low Carbon Transition Facility, SMEs can also benefit from better financing rates.
As part of the SLF programme’s launch, CIMB inked a memorandum of cooperation (MoC) with MGTC, with both parties committing to explore opportunities to drive sustainability adoption among SMEs. A signing ceremony was held recently between the two parties, witnessed by Natural Resources, Environment and Climate Change minister Nik Nazmi Nik Ahmad.
The SLF programme is the latest extension of CIMB’s award-winning GreenBizReady proposition that was launched in 2021 as a complimentary one-stop sustainability solution for SMEs. Through GreenBizReady, CIMB helps SMEs to achieve their sustainability targets through training and advisory services, as well as matching them with suppliers and associates.
CIMB’s SLF Programme helps SMEs to overcome long-standing challenges of measurement and verification of sustainability targets in a holistic and cost-effective manner, providing access to incentives that have generally only been available to corporates in the past. The programme is also aligned with the globally recognised Loan Market Association’s Sustainability-Linked Loan Principles.
Besides reducing negative impact on the environment, the programme also aims to ensure SMEs’ business resilience and continued access to export markets by improving their sustainability performance. This will help them to adapt to rapid market and regulatory developments such as the EU Carbon Border Adjustment Mechanism, upcoming local regulations and the transition towards sustainable supply chains within the global economy.
CIMB’s SLF programme for SMEs extends the bank’s track record of helping businesses to advance their sustainability aspirations, having launched its SLF for corporate clients in 2020. The SLF for corporate clients has seen growing interest and acceptance, having increased more than threefold in 2022 to RM1.2 billion, from RM367 million in 2021.
The programme is also part of CIMB’s ambition to mobilise RM60 billion in sustainable finance by 2024, having met its original target of RM30 billion two years ahead of schedule. As at end 2022, CIMB has mobilised RM54.3 billion in sustainable finance under its Green, Social, Sustainable Impact Products and Services Framework, putting CIMB firmly on track towards becoming an Asean sustainability leader by 2024.
