PETALING JAYA: CIMB Group Holdings Bhd has strengthened its commitments towards sustainable finance and climate action, and committed 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, and applicable across the group in all its operating markets, its first Coal Sector 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.
With the issuance of the guide, CIMB becomes the first banking group in Malaysia and the first in Southeast Asia to commit to phasing out coal from its portfolio by 2040.
CIMB Group chairman Datuk Mohd Nasir Ahmad said the group is working towards announcing more sustainability-related measures, in particular, with respect to its positive impact financing target.
“The release of the guide is a milestone that represents our continuous progress on the sustainable financing front. Our sector guides and positive impact finance agenda help us to take a more holistic approach to decision-making, incorporating economic, environmental and social considerations.
“This will also support governments across the region in their efforts to increase the share of renewable energy in their energy sector blueprints, taking into account each country’s specific needs and developmental agenda.”
The group will also intensify its efforts to support and incentivise existing and new clients, including those that are operating in the brown sectors, to transition towards a low-carbon, climate resilient economy
Earlier this year, CIMB was one of the first banks in Malaysia to announce its sustainability-linked loan (SLL) offerings, having committed RM3 billion to SLLs for corporate borrowers through 2024.
In 2019, CIMB instituted its first Group Sustainable Financing Policy as a framework to manage its exposure to sustainability risks. It has since enhanced the policy with various sector guides for high sustainability risk sectors like palm oil, forestry, oil and gas, and construction and real estate.
