RHB commits Rm5bil for green loans
The move is in line with the bank’s sustainability framework
PETALING JAYA: RHB Banking Group has committed Rm5bil for green financing by 2025, through its core business activities of lending, capital markets advisory and fundraising, as well as investment.
The green financing commitment comes in line with RHB’S Sustainability Framework, which aims to embed sustainable practices into the group’s business and operations.
As at Sept 30, RHB has grown its green financing portfolio to Rm3bil, up 6.3% from Dec 31, 2019, in support of green projects that include renewable energy, green buildings, sustainable water and wastewater management. RHB Banking Group group managing director Datuk Khairussaleh Ramli said the bank intends to play a bigger role in supporting the growth of the green economy by encouraging its customers to adopt more sustainable business practices, through its Rm5bil commitment for green financing.
“We are stepping up our efforts to support the country’s aspiration to transition to a low-carbon and climate resilient economy.
“Promoting the growth of the green economy involves channelling capital towards supporting sectors and economic activities that can make the biggest difference in the fight against climate change. This also requires us to nurture businesses, and stimulate innovation and development of environmentally-friendly products and services,” he said.
Towards this, RHB Investment Bank Bhd (RHBIB), the investment banking arm of RHB Banking Group, was recently awarded the Green Deal of the Year at the Asian Banking & Finance Corporate & Investment Banking Awards 2020 for arranging a Rm200mil Asean Green Sustainable and Responsible Investment (SRI) sukuk programme.
In addition, the maiden issuance under the sukuk programme was awarded the Best Asean Green SRI Sukuk at The Asset Triple A Islamic Finance Awards 2020.
The sukuk programme adopts the syariah principles of wakalah bi al-istithmar and murabahah (via tawarruq arrangement), and proceeds from the issuance are used to fund SRI projects, among other syariah-compliant purposes. RHBIB was the sole principal adviser, sole lead arranger and sole lead manager for the sukuk programme.
“We have put in place a clear roadmap in promoting sustainable and responsible financing within the group, by ensuring that our risk management processes integrate Environmental, Social and Governance (ESG) considerations.
“We are also mindful of the development stage of the country and the need to be practical in our adoption of ESG considerations.
“Our role within the community goes beyond simply advocating commitment to green financing, but also ensuring the socioeconomic well-being of our communities,” added Khairussaleh.
RHB Banking Group supports the United Nations Sustainable Development Goals and believes that the RHB Sustainability Framework will contribute towards the achievement of these goals as well as the group’s sustainability vision and aspirations.