3 July 2024
The Bank targets to reduce the emissions intensity of its oil & gas and real estate portfolios by 16% and 34% respectively
Kuala Lumpur: CIMB Group Holdings Berhad (“CIMB” or “the Group”) today announced its 2030 climate targets for its oil and gas and real estate portfolios, thus becoming the first Malaysian bank to complete its 2030 decarbonisation target setting for high-emitting sectors in pursuit of its broader 2050 Net Zero commitments, that include thermal coal mining, cement, palm oil and power.
The Group has also updated its previously published whitepaper detailing its decarbonisation plans, meticulously delineating sector-specific pathways and immediate strategies for all six sectors, which collectively accounts for 60% of the Group’s financing portfolio emissions as of 2023.
Gurdip Singh Sidhu, Chief Executive Officer of CIMB Malaysia and CIMB Bank Berhad said, “We are pleased to announce the completion of CIMB’s 2030 decarbonisation targets, marking a significant milestone toward realising our long-term Net Zero target by 2050. These interim targets demonstrate our accountability and reinforce our commitment to facilitating a just transition across ASEAN. By breaking down our long-term goal into actionable and measurable milestones, we are paving the way for tangible progress. While we implement proactive measures to address climate risks in our portfolio and promote sustainable finance practices, CIMB remains committed to support and empower our clients in transitioning to more sustainable business practices.”
“On top of that, our sector-specific decarbonisation plans are carefully tailored to closely align with the respective government policies and directives of each country, demonstrating our dedication to advancing national objectives across the regions we operate in”, added Gurdip, who also oversees the overall Group Sustainability efforts in CIMB.
CIMB is committed to assisting its oil and gas clients as they decarbonise and shift towards renewable and low-carbon alternatives in their portfolios. To that end, CIMB aims to facilitate the transition by reducing Financed Emissions Lending Intensity ("FELI") of its oil and gas portfolio by 16% by 2030. This target encompasses Scope 1, 2 and 3 emissions originating from pure-play upstream exploration and production companies as well as integrated oil and gas players. The decarbonisation target is set based on the International Energy Agency Net Zero Emissions by 2050 Scenario (“IEA NZE”), enhanced with insights from the International Energy Agency Sustainable Development Scenario (“IEA SDS”), to formulate a Net Zero scenario appropriate for the ASEAN context.
Concurrently, starting 1 January 2025, the Group will also cease new financing specifically for new upstream oil fields approved for development post 2021. This aligns with the IEA NZE, which states that globally, no new oil and gas projects are necessary beyond those committed as of 2021, given current assets meet supply and demand. However, acknowledging the pivotal role of natural gas as a transition fuel needed by ASEAN, CIMB will continue to support natural gas initiatives. This is especially crucial in reducing dependence on coal within the power sector and ensuring energy security through self-sufficiency in the short term.
The Group has set a target to reduce the operational emissions intensity of its commercial real estate portfolio by 34% by 2030. This interim target, which comprises its real estate clients’ Scope 1 and 2 emissions are set in line with improvements in energy efficiency implied by the Carbon Risk Real Estate Monitor (“CRREM”) but adopts a power grid decarbonisation rate in line with the IEA Announced Pledges Scenario (“APS”) pathway.
The selection of the reference scenario acknowledges that although CIMB’s real estate clients are able to control the pace at which they improve their energy efficiency, achieving these targets rely heavily on the decarbonisation of the grid-power supply, whereby CIMB recognises that its clients have limited influence.
To meet this target, CIMB will actively seek to finance the development, retrofitting, and maintenance of more energy-efficient buildings including energy transitions in buildings through onsite renewable energy installations such as rooftop solar PV and energy storage. Concurrently, CIMB also supports decarbonisation of the power grid through its Net Zero aligned Power sector target.
In 2021, CIMB was the first bank amongst emerging markets globally to announce its commitment to exit coal by 2040, in line with the goals of the Paris Agreement and most recently, the first bank globally to announce a Net Zero decarbonisation pathway for its palm oil portfolio. A summary of CIMB’s 2030 climate targets are as below:
