PETALING JAYA: Malayan Banking Bhd (Maybank) expects to see a gradual increase in environmental, social and governance (ESG)-linked loans, as it grows and strengthens its position towards becoming a regional sustainability leader by 2025.
Maybank group president and chief executive officer Datuk Abdul Farid Alias said ESG-linked loans currently only comprised a marginal portion of its total loans portfolio.
“We had RM8bil in green financing, including renewable energy, up to March 2021 and this will grow.
“From an accounting perspective, it accounts for 5% of our total loans,” he said yesterday during a virtual media briefing on Maybank’s Sustainability Day.
ESG-linked loans are debt financing transactions where the margin payable is linked to sustainability-related achievements.
Separately, Abdul Farid said Maybank will be emphasising four ESG commitments as part of its M25 Sustainability agenda, a strategy that details the group’s sustainability efforts going forward.
The four key sustainability commitments are to mobilise RM50bil in sustainable finance by 2025; improve the lives of one million households across Asean by 2025; achieve a carbon-neutral position for scope one and scope two emissions by 2030 and net-zero carbon equivalent position by 2050; and achieve one million hours per annum on sustainability and delivering one thousand significant sustainable development goals-related outcomes by 2025.
Maybank building
These commitments will be translated down to the various business and support sectors, as well as subsidiaries as specific key performance indicators for them, said Abdul Farid.
“We want to create a long-lasting relationship with our stakeholders,” he said.
Under its commitment to mobilise RM50bil in sustainable finance by 2025, Maybank said this will cover direct lending or investment and services related to arranging, syndicating, fundraising, underwriting and advisory, all of which will integrate ESG-related criteria.
“The group is currently developing a sustainable product framework to complement existing efforts in the area of sustainable finance.
“Among others, this framework will outline the methodology and procedures to classify financial products and services offered by Maybank into various categories – green, sustainable and/or transition solutions.
“Targeted to be implemented within the year, this will account towards the recognition of the group’s sustainable financial achievement,” it said in a statement.
To drive the commitment of improving the lives of one million households across Asean by 2025, Maybank said it aims to contribute towards the betterment of the people and society within the region.
“This includes initiatives to help with employment, raising income as well as reducing inequality and poverty, thereby creating a more equitable society.
“Maybank’s efforts under this initiative will be aligned to the 169 targets under the 17 United Nations Sustainable Development Goals.”
Maybank said this commitment will be driven through three key strategies – equipping communities with life-long financial skills and knowledge, addressing current and situational needs, as well as building financial resilience.
Separately, Maybank said its Carbon Neutral 2030 commitment refers to the group’s own emissions, while the Net Zero 2050 commitment refers to achieving an overall balance between all direct and indirect carbon emissions covering its operations and the business activities it finances.
“As part of these commitments, Maybank will manage its internal environmental impact in areas such as emissions, waste and water consumption.”