CIMB COMPLETES SETTING 2030 DECARBONISATION TARGETS FOR HIGH EMISSION SECTORS

KUALA LUMPUR, July 3 (Bernama) — CIMB Group Holdings Bhd said it has become the first bank in Malaysia to meet its 2030 decarbonisation targets in high-emission sectors.

The banking group today announced targets for its oil and gas (O&G) and real estate portfolios as part of its broader commitments to net zero emissions by 2050, which included targets for the coal mining, cement, palm oil and power sectors.

CIMB Malaysia and CIMB Bank Bhd chief executive officer Gurdip Singh Sidhu said that to help the O&G sector decarbonise and transition towards renewable and low-carbon alternatives, the group aims to facilitate the transformation by reducing the financing intensity of carbon loans (FELI) of its O&G portfolios by 16 per cent by 2030 to 583 tonnes of carbon dioxide equivalent per million ringgit of financing (tCo2e/MYR mm) from 694 in 2022.

“This target includes Scope 1, 2 and 3 emissions from pure upstream exploration and production companies, as well as from integrated oil and gas operators.

“The decarbonisation target was set based on the International Energy Agency’s 2050 net-zero emissions scenario (IEA NZE), supplemented with insights from the International Energy Agency’s Sustainable Development Scenario (IEA SDS), to formulate a net-zero emissions scenario suitable for the ASEAN context,” he told a news conference announcing the targets today.

Generally, Scope 1 includes direct emissions that are owned or controlled by a company, while indirect Scope 2 and 3 emissions are a consequence of a company’s activities but come from sources that it does not own or control.

At the same time, he said that from January 1, 2025, the group will also cease new financing, specifically for new oil fields approved for development after 2021. This is in line with the IEA NZE, which states that no new oil and gas projects are necessary globally beyond those approved for 2021, given that current assets meet supply and demand.

“However, recognising the critical role of natural gas as a transition fuel needed by ASEAN, CIMB will continue to support natural gas initiatives,” Gurdip said.

At the same time, he added that the group has set itself a target to reduce the operational emissions intensity of its commercial real estate portfolio by 34 percent by 2030, to 77 percent of the physical emissions intensity from 117 percent in 2022.

This interim target, which includes real estate clients’ Scope 1 and 2 emissions, is in line with the energy efficiency improvements suggested by the Carbon Risk Real Estate Monitor (CRREM) but adopts a rate of grid decarbonisation consistent with the IEA Announced Pledges Scenario (APS) pathway.

“To achieve this goal, CIMB will actively seek to finance the development, retrofit and maintenance of more energy-efficient buildings, including energy transformation in buildings through on-site renewable energy installations such as rooftop solar panels and energy storage.

“At the same time, CIMB also supports the decarbonisation of the energy grid through its Net Zero energy sector target. In 2021, CIMB was the first emerging market bank globally to announce its commitment to phase out coal by 2040, in line with the goals of the Paris Agreement,” he added.

Group Chief Sustainability Officer Luanne Sieh said the banking group is now actively implementing strategic measures in existing business and risk management processes, a comprehensive effort that is expected to last the next two to three years and will require extensive coordination across the bank.

“Collaboration is key, and we are working closely with our clients to drive meaningful change and decarbonize the real economy while safeguarding a just transition. On the other hand, we cannot work against the grain by worsening the situation of vulnerable people who are less fortunate without any transition support mechanism,” Sieh said.

She added that the goals set by the group would need to be gradually updated over the next five years, in line with changes in government regulations, customer readiness and technological advances.

The group announced last year that it had tripled its sustainable finance target to RM100 billion by 2024, up from the RM30 billion target announced earlier in 2021. By December 2023, CIMB had recorded more than RM80 billion in sustainable finance, is on track to achieve its RM100 billion target and will announce new plans in due course.

— BERNAMA

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