KUALA LUMPUR (April 18): RHB Bank, Malaysia’s fourth-largest bank by assets, said on Thursday it views sustainable financing as presenting more opportunities than challenges, rather than affecting its overall profit from financing activities.
Considering the need for sustainable financing, the bank has raised its target to provide over RM50 billion by 2026, after cumulatively mobilising RM23.8 billion in sustainable financial services by the end of the financial year 2023, surpassing its initial goal of RM20 billion.
Of this amount, RM11.3 billion was allocated to green initiatives, including renewable energy projects and energy efficiency solutions, contributing to the bank’s objective of achieving net zero emissions by 2050.
“Through our engagement with various industries, we have identified numerous opportunities for sustainable financing, particularly with the government’s introduction of the NETR [National Energy Transition Roadmap] and NIMP 2030 [New Industrial Master Plan 2030],” said RHB group chief executive officer Mohd Rashid Mohamad. “We are confident that we will reach the RM50 billion target by 2026,” he added.
As of the financial year ended December 2023 (FY2023), RHB had financed over RM23.8 billion in sustainable financial services. For the first quarter of FY2024, Rashid noted, “we are observing further improvement in the numbers,” without specifying the exact amount.
“Sustainable financing is not just a business opportunity; it’s a commitment to our future. By focusing on high-impact sectors and SMEs, we’re driving a responsible transition to a low-carbon economy,” Rashid said.
In terms of financing segments, RHB identified five high-impact sectors that require increased focus due to their significant contributions: energy supply, palm oil, oil & gas, property & construction, and transportation.
These sectors account for nearly 60% of the group’s financial exposure and over 80% of its financed emissions (7.63 metric tonnes of carbon dioxide equivalent [MTCO2e]).
“By 2030, RHB aims to achieve a 20% reduction in emissions from these sectors. By 2050, our goal is to accomplish up to a 96% reduction in financed emissions across these sectors,” Rashid said.
Asked if the bank sees itself as excluding companies which do not have a transition framework or meet certain criteria for transition finance, Rashid said, “The bank is not discounting any companies that are transitioning or those without a transition plan for ESG, especially among the small-medium-enterprises (SMEs) companies.”
He noted that the bank has an equal responsibility to educate and support the SMEs towards their journey in the sustainability process by advocating and assisting them in understanding the need for transition finance.
Meanwhile, its group chief sustainability officer Norazzah Sulaiman, who was also present at the media briefing of RHB’s Net Zero Commitment and Strategy, said, “We do acknowledge that different customers have different levels of readiness, as not everybody is at the same level.”
“As we all know, SMEs are at the bottom level. So, the engagement needs to take place not just within the organisation, but also for the customers. Thus, we need to bring in third parties to help them.”
At the midday break on Thursday, RHB gained 0.37% or two sen to RM5.49 with 4.67 million shares traded.
Source: https://theedgemalaysia.com/node/708437