Taking the lead in sustainability

KUALA LUMPUR: CIMB Group Holdings Bhd, the country’s second-largest financial group by assets, is set to take the lead in championing sustainability practices in Malaysia and eventually in Asean.

In an interview with the New

Straits Times, group chief executive officer Tengku Datuk Seri Zafrul Tengku Abdul Aziz said in practising sustainability, CIMB was ensuring the longevity of the bank, its partners employees, customers and communities.

“We have integrated sustainability as one of the key strategic pivots of our Forward23 transformation strategy. Our five-year aspiration is to become a leader in sustainability practices in the Asean community, for strategic differentiation and future-proofing of the group.

“We will roll out the initiatives in Malaysia this year, followed by Indonesia, Singapore and Thailand, before making our way to

By 2023, we hope to emerge as one of the top three sustainable banking groups in Asean.

TENGKU DATUK SERI ZAFRUL TENGKU ABDUL AZIZ

CIMB Group CEO

the rest of Asean. By 2023, we hope to emerge as one of the top three sustainable banking groups in Asean,” said Tengku Zafrul.

The bank is also targeting three financial targets — achieve a cost-to-income ratio of below 45 per cent, a return-on-equity of more than 12 per cent and a common equity Tier 1 ratio of more than 13 per cent.

For its sustainability drive, the group is gauging its progress against seven Sustainable Development Goals — Decent work and economic growth; Industry innovation and infrastructure; Responsible consumption and production; Peace, just and strong institution; Reduced inequalities; Climate action; and Life on land.

Tengku Zafrul said the group was finalising a framework to incorporate most of the measures.

“We are developing a framework for sustainable financing, with a clear exclusion list and sectorspecific policies and guidelines. We are rolling it out in stages across the region. Our goal is to reduce environmental and social harm and generate positive outcomes, through our operations, products and services,” he said.

“We want to encourage our clients, vendors and other stakeholders to do the same.”

Tengku Zafrul said CIMB Group had as of last year been the only Asean banking group to support the United Nations Environment Programme Finance Initiative to promote sustainable finance.

“The biggest challenge over the next five years is to increase awareness of sustainability principles and sustainable development among CIMB’s stakeholders and the industry,” he added.

CIMB has allocated some of its resources for the unbanked segment of society, namely the Bottom 40 (B40) households segment and the micro small-andmedium enterprises (SMEs).

“We are targeting RM12 billion for B40 segment financing needs for the next two years and they include loan facilities ranging from home and car to Amanah Saham Bumiputera and personal financing from now till 2020.

“We have also allocated RM15 billion till next year for 100,000 SMEs in need of loans below RM500,000.”