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KUALA LUMPUR, May 12 (Bernama) -- Bursa Malaysia Bhd and CIMB Group Holdings Bhd have inked a memorandum of understanding (MoU) to accelerate the adoption of environmental, social and governance (ESG) practices among Malaysian public listed companies (PLCs) through the #financing4ESG initiative.
Through the MoU, CIMB will become the first home-grown bank to collaborate with the exchange on the initiative.
A joint statement by Bursa Malaysia and CIMB today said under the MoU, CIMB would collaborate with Bursa Malaysia to offer sustainable finance offerings for Malaysian PLCs in alignment with the ratings model of the FTSE4Good Bursa Malaysia (F4GBM) index.
It said the collaboration aimed to help Malaysian PLCs improve their sustainability performance and ratings for inclusion into the index and support their transition towards more sustainable business practices through various green, social and sustainable impact products and services (GSSIPS) offered by CIMB.
“As part of the collaboration, Bursa Malaysia will also coordinate joint engagement and onboarding sessions for eligible PLCs together with CIMB on the F4GBM framework as well as the group’s solutions under its GSSIPS Framework,” it said.
It said these solutions might include CIMB’s existing ESG offerings such as sustainability-linked loans (SLLs) and sustainability-linked treasury solutions for corporate clients, which encourage sustainable practices by providing financial incentives to the clients based on their achievement of pre-agreed sustainability performance targets (SPTs).
“CIMB may also reference the F4GBM framework and ratings model in structuring sustainability-linked transactions with the relevant SPTs for corporates that seek to raise financing or enter into a derivative transaction whilst also strengthening their ESG adoption,” it said.
Bursa Malaysia’s chief executive officer Datuk Muhamad Umar Swift said as ESG compliance and disclosure have become a global demand, having CIMB together with the exchange in the journey would enable Malaysian PLCs to become regional leaders in the ESG space.
“Being one of the largest banks in Malaysia, CIMB is in a position of influence to encourage its clients to adopt ESG best practices,” he said.
CIMB’s group chief executive officer Datuk Abdul Rahman Ahmad said the strategic collaboration is firmly in line with CIMB’s sustainability agenda under its Forward23+ strategic plan.
“We look forward to working closely with Bursa Malaysia and engaging Malaysian PLCs towards advancing our shared sustainability agenda and in doing so, support the Malaysian Government’s commitment to achieve carbon neutrality by 2050,” he said.
The statement said complementing the sustainable finance focus of #financing4ESG, CIMB also aimed to improve PLCs’ understanding and ability to manage supply chain risks, including through capacity building, financing or other value-add services.
It added that CIMB has already been supporting small and medium enterprises in this area through CIMB GreenBizReady, a comprehensive programme which provides them with the knowledge, tools and support to incorporate ESG practices into their businesses.
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