Bank Islam Malaysia Bhd achieved a significant milestone by surpassing its initial target of RM4 billion in green financing, achieving RM4.8 billion in September 2024, well ahead of its 2025 goal, highlighting its key role in advancing the country’s green economy.
“Building on this success, Bank Islam has set an ambitious target to grow its sustainable finance portfolio to RM28 billion by the end of 2025,” the bank said.
As a leader in Shariah-compliant sustainable finance, the bank aims to accelerate Malaysia’s green economy while generating lasting value for businesses, communities and the environment.
Bank Islam also highlighted the Ihsan Sustainability Investment Account (ISIA) launched in 2023, as central to its sustainability strategy, focusing on investments aligned with the United Nations (UN) Sustainable Development Goals (SDGs) and Bank Negara Malaysia’s (BNM) Climate Change and Principle-Based Taxonomy (CCPT).
Currently, the bank’s green finance initiatives aims to promote environmental sustainability and drive inclusive economic growth by creating jobs and supporting micro, small and medium-sized enterprises (MSMEs), agribusinesses and underserved communities while boosting rural development and promoting economic resilience.
Its group chief executive officer Datuk Mohd Muazzam Mohamed said the bank’s commitment to green finance goes beyond regulatory compliance, aiming to create positive change that will shape Malaysia’s economy for generations.
“By focusing on sustainable financing solutions, we are not just supporting industries essential to Malaysia’s future, such as renewable energy (RE) and manufacturing, but also ensuring we protect the environment for future generations,” he said.
Bank Rakyat Issues Inaugural ASEAN Sustainability SRI Sukuk
Another local bank is also thriving in sustainable financing as Bank Kerjasama Rakyat Malaysia Bhd (Bank Rakyat), through Imtiaz Sukuk II Bhd issued its maiden RM500 million ASEAN Sustainability SRI (sustainable and responsible investment) Sukuk.
The issuance is based on the Shariah principle of Wakalah Bi Al-Istithmar from Bank Rakyat’s existing RM10 billion Sukuk Wakalah Programme.
Maybank Investment Bank Bhd (Maybank IB) is the joint lead manager and facility agent, while Maybank Islamic Bhd is the Shariah adviser for this issuance.
In a joint statement, Bank Rakyat and Maybank IB said that the MARC Ratings Bhd has assigned the highest ‘Gold’ Impact Bond Assessment for Bank Rakyat’s Sustainability Sukuk Framework which governs the bank’s future sustainable financing raised under the use-of-proceeds format.
“The framework is aligned with the core components of ASEAN green/social/sustainability bond standards issued by the ASEAN capital markets forum and SRI Sukuk Framework issues by the Securities Commission Malaysia,” the statement said.
Maybank IB chief executive officer Michael Oh-Lau said Bank Rakyat’s ASEAN Sustainability SRI Sukuk has attracted overwhelming interest from a wide range of investors, including financial institutions, government agencies, insurance companies and asset management companies.
“The sustainability offering appealed to the investors given its scarcity and growing focus on sustainability investments.
“From 2021 to June 2024, Maybank Group has mobilised RM83.2 billion in sustainable finance, exceeding our 2025 target of RM80 billion as part of our sustainability commitment,” he said.
Meanwhile, Bank Rakyat acting CEO Ahmad Shahril Mohd Shariff said the proceeds raised from the sukuk will be used to finance eligible projects that contribute towards environmental and social benefits as outlined in the co-operative bank’s framework.
“This efforts will further support the bank’s objective to expand our green and social financing portfolio whilst reinforcing our role as one of the key contributors to the economic growth of the nation,” he added.
