Bursa Malaysia Bhd and CIMB Group Holdings Bhd are collaborating to accelerate the adoption of environmental, social and governance (ESG) practices among Malaysian public listed companies (PLCs) through the #financing4ESG initiative.
Through this MoU, CIMB will become the first home-grown bank to collaborate with the exchange on #financing4ESG. CIMB will collaborate with Bursa Malaysia to offer sustainable finance offerings for Malaysian PLCs in alignment with the rating model of the FTSE4Good Bursa Malaysia (F4GBM) index.
The collaboration aims to help Malaysian PLCs improve their sustainability performance and ratings for inclusion in the index, and at the same time support their transition towards more sustainable business practices through various green, social, sustainable impact products and services (GSSIPS) offered by the group.
As part of the collaboration, Bursa Malaysia will also coordinate joint engagement and onboarding sessions for eligible PLCs together with CIMB on the F4GBM framework, as well as the group’s solutions under its GSSIPS framework.
These solutions may include CIMB’s existing ESG offerings such as sustainability-linked loans and sustainability-linked treasury solutions for corporate clients, which encourage sustainable practices by providing financial incentives to the clients based on their achievement of pre-agreed sustainability performance targets (SPTs).
CIMB may also reference the F4GBM framework and rating model in structuring sustainability-linked transactions with the relevant SPTs for corporates that seek to raise financing or enter into a derivative transaction whilst also strengthening their ESG adoption.
“As ESG compliance and disclosure have become a global demand, we are pleased to have CIMB together with us on our journey to enable Malaysian PLCs to become regional leaders in the ESG space,” said Datuk Muhamad Umar Swift, CEO of Bursa Malaysia.
“Being one of the largest banks in Malaysia, CIMB is in a position of influence to encourage its clients to adopt ESG best practices.”
Dato’ Abdul Rahman Ahmad, group CEO of CIMB Group said, “CIMB is pleased to join the #financing4ESG initiative by Bursa Malaysia, as it is critical for the financial sector to encourage ESG adoption within the corporate sector through sustainable finance. This will help to enhance the long-term resilience and competitiveness of Malaysian businesses, and at the same time support the transition towards a net-zero economy.
“This strategic collaboration is firmly in line with CIMB’s sustainability agenda under our Forward23+ strategic plan. We look forward to working closely with Bursa Malaysia and engaging Malaysian PLCs towards advancing our shared sustainability agenda, and in doing so support the Malaysian Government’s commitment to achieving carbon neutrality by 2050.”
Complementing the sustainable finance focus of #financing4ESG, CIMB also aims to improve PLCs’ understanding and ability to manage supply chain risks, including through capacity building, financing or other value-add services. CIMB has already been supporting SMEs in this area through CIMB GreenBizReady, a comprehensive programme that provides SMEs with the knowledge, tools and support to incorporate ESG practices into their businesses.
In 2021, CIMB announced enhanced sustainability commitments in line with its ambition to become an ASEAN sustainability leader. These include among others the Group’s commitment to achieve Net Zero greenhouse gas emissions including scope 3 financed emissions by 2050, as well as its target to mobilise RM30 billion in sustainable finance under its GSSIPS Framework by 2024.
The #financing4ESG initiative sets the foundation for Bursa Malaysia to collaborate with other ecosystem players to advance the nation’s ESG adoption, which is in line with the Exchange’s vision to be a leading sustainable and globally connected marketplace. PLCs interested in learning more about the initiative or improving their general ESG practices may contact the Exchange’s Index & Sustainable Business unit via email at email@example.com.