Maybank Sustainable Product Framework Promotes Green Finance

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by KnowESG

Maybank is the first Malaysian bank to build a Sustainable Product Framework (SPF) to promote green, social, and sustainable products. The framework was implemented group-wide across Islamic and conventional products effective September 1, 2022, to support the Group's aim to mobilise RM50 billion in sustainable finance by 2025.

This framework encompasses products offered in corporate lending, debt and equity capital markets, trade finance, retail financing, insurance, asset and wealth management, derivatives, and deposits, following best practices accepted by worldwide peers. 

The framework's primary goal is to assist Maybank's business teams in designing green, social, and sustainable goods by considering the intended use of the proceeds from the product or solution offered, as well as whether it meets the Group's sustainable standards throughout its life-cycle.

Tan Sri Dato' Sri Zamzamzairani Mohd Isa, Chairman of Maybank, stated that the bank had taken a leadership position by introducing such a framework into its business, allowing products and solutions to be designed based on the readiness and needs of its large customer base, which includes retail, non-retail, and large corporates.

“Many of our customers are at different stages of the sustainability journey. We want to support them through this long-term journey and for that, we not only need to be clear ourselves on what is defined as sustainable finance but also know how to work with our customers to offer them dedicated sustainable, sustainably-linked or transitionary solutions based on their needs,” he said.

Meanwhile, Group President & CEO of Maybank, Dato’ Khairussaleh Ramli said Maybank understands the responsibility it bears in channelling capital towards projects that can help create a positive impact on the environment or that drive a positive social agenda.

“As a leading financial institution in ASEAN and in line with our aspiration to be a regional ESG leader, we want to be able to drive sustainable financing through our regional operations in a more meaningful and impactful manner. This has led us to draw clear definitions of green, social and transition activities to guide our risk, business and sales teams on eligible sustainable financing and solutions. We hope that by giving our teams the right tools and clarity on perimeters of sustainable financing, this can expedite the growth of timely ESG financing solutions over the near term as well as enhance our efficiency in turnaround time for processing of these solutions,” he said.

The SPF includes methodology and procedures for classifying and reporting Maybank's sustainable financial products and services. It includes classification logic, eligibility criteria, verification processes, and exclusion criteria for products to be recognised as sustainable financing.

The framework also outlines qualifying transition elements for several hard-to-abate industries following the International Capital Markets Association's Climate Transition Finance Handbook and the Transition Roadmap Initiative's decarbonisation pathway.

The SPF applies to any financial products and services that include ESG factors in business or investment decisions to achieve sustainable development outcomes or positively contribute to the achievement of the Paris Agreement goals and United Nations Sustainable Development Goals (UN-SDG).

The adoption of this framework comes as Maybank approaches the halfway point of its RM50 billion sustainable financing target by 2025. The Bank mobilised more than RM13.6 billion in sustainable finance in FY2021 and RM10.3 billion as of 30 June 2022 (1H FY2022), above its FY2022 objective of RM9 billion. Over 80% of the sustainable funding mobilised in the first half of FY2022 came from Malaysia and Singapore, with the majority of corporate financing directed toward the property, infrastructure, and renewable energy sectors.

Tan Sri Zamzamzairani, who is also Chairman of Maybank’s Board Sustainability Committee, said: 

"Given our significant momentum in mobilising sustainable finance solutions over the last one and a half years coupled with the rollout of the SPF, we will further evaluate our ability to do more sustainable financing in the immediate future."

Meanwhile, as of 1H FY2022, Maybank had exceeded its FY2022 targets for two of its other sustainability commitments. Maybank has achieved 215,945 households as of 1H FY2022 against the full-year target of 150,000 households through various community flagship programmes and efforts to drive financial inclusion among the lower income group under its second commitment of improving the lives of 1 million households across ASEAN by 2025.

Maybank's third sustainability promise is to achieve carbon neutrality for scope 1 and 2 emissions by 2030 and net zero carbon equivalent by 2050. Maybank successfully reduced 41.1% of its Scope 1 and 2 emissions against its 2019 baseline, compared to its FY2022 target of 40% reduction, by launching Malaysia Renewable Energy Certificates and implementing different energy-saving programmes.

Maybank employees have clocked 848,354 sustainability hours as of 1HFY22 as part of ongoing measures to promote diversity, equity and inclusion, transparency and governance, and sustainability culture.

Source: Maybank

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