KUALA LUMPUR: CIMB Group Holdings Bhd has become the first Malaysian bank to complete its 2030 decarbonisation target setting for high-emiting sectors financing portfolios, such as thermal coal mining, cement, palm oil and power, in pursuit of its broader 2050 net zero commitments.
The bank has set a target to reduce the emissions intensity of its oil and gas financial portfolios by 16 per cent and as much as 34 per cent for the real estate portfolio by 2030.
The bank also updated its previously published whitepaper detailing its decarbonisation plans, meticulously delineating sector-specific pathways and immediate strategies for all six sectors, which collectively accounts for 60 per cent of its financing portfolio emissions as of 2023.
CIMB Bank and CIMB Malaysia chief executive officer Gurdip Singh Sidhu said the interim targets demonstrate the bank's accountability and reinforce its commitment to facilitating a just transition across Asean.
"By breaking down our long-term goal into actionable and measurable milestones, we are paving the way for tangible progress. While we implement proactive measures to address climate risks in our portfolio and promote sustainable finance practices, CIMB remains committed to support and empower our clients in transitioning to more sustainable business practices," he said in his presentation at the CIMB Sustainability Roundtable 2024.
Gurdip added that the bank's sector-specific decarbonisation plans are carefully tailored to closely align with the respective government policies and directives of each country, demonstrating their dedication to advancing national objectives across the regions they are operating in.
He also revealed that the bank's sustainability finance has reached RM86.2 billion as at Deember 2023, on track to achieve its RM100 billion target by 2024 under its green, social, sustainable impact products and services (GSSIPS) framework.
CIMB group chief sustainability officer Luanne Sieh said the bank is now actively implementing strategic measures into existing business and risk processes, a comprehensive effort that they anticipate will span over the next two to three years, requiring extensive coordination across the bank.
"Collaboration is key, and we are working closely with our clients to drive impactful change and real economy decarbonisation while safeguarding a just transition," she added.
In 2021, CIMB was the first bank amongst emerging markets globally to announce its commitment to exit coal by 2040, in line with the goals of the Paris Agreement and most recently, the first bank globally to announce a Net Zero decarbonisation pathway for its palm oil portfolio.
CIMB marked another milestone through its election into the net zero banking alliance (NZBA) steering group.
The NZBA, led by industry and convened by the UN, is a coalition of global banks committed to financing the transition to net zero greenhouse gas emissions by 2050.
As part of this steering group, CIMB plays a crucial role in overseeing decision-making and strategy as well as providing a vital emerging market perspective to the table.