Maybank leads the pack on ESG adoption

MALAYAN Banking Bhd (Maybank) has low exposure to environmental, social and governance (ESG) vulnerable sectors due to small loan exposure (funded) to vulnerable sectors such as palm oil (low at 2.29%), oil and gas (2.04%), forestry and logging (0.66%), coal (0.2%) and mining (0.18%) as at end-March 2021. “Its non-funded exposure or holdings of bonds related to these vulnerable sectors were also low at well below 1%,” AmInvestment Bank Bhd analyst Kelvin Ong noted in a research report recently.

Maybank aims to become the regional ESG leader by 2025 with a net-zero carbon emissions position under the group’s five-year strategy, the M25 Plan, which was unveiled in April 2021. Malaysia’s largest banking group by assets outlined four key commitments including a RM 50 billion commitment in sustainable financing, improving the lives of one million households across Asean, achieving carbon neutrality on own emissions by 2030 and a net-zero carbon emission position by 2050. The lender aims to achieve one million hours per annum on sustainability and deliver 1,000 significant Sustainable Development Goals-related outcomes.

Under Maybank’s first ESG commitment, ESG criteria will be integrated into the direct lending, investments and services of business divisions, and guided by sustainable product frameworks. For the second commitment, Maybank will continue its existing community initiatives, in providing welfare assistance and financial aid to small and medium enterprises (SMEs) and underserved communities. The group also intends to widen its retail product reach to the untapped communities for greater financial inclusion and improve the financial literacy of SMEs and school children.

On the third commitment, Maybank plans to reduce its carbon emissions by sourcing renewable energy, improving infrastructures, reducing staff travelling, and increasing its green building footage. The group will also manage its water and waste consumption and recycling efforts. Maybank’s fourth commitment includes people engagement, strengthening of business ethics policies and practices, responsible data management, compliance with the law, and strengthening the transparency and trust among stakeholders.

Maybank has established a board sustainable committee that reports to the board of directors and sits on top of the exco sustainable committee and its chief sustainability officer. Maybank also rolled out its sustainability framework with the relevant risk acceptance criteria for industries and customers, while its sustainable product frameworks are being developed.