RHB Banking Group’s green portfolio has increased to RM3.25 billion year-to-date (YTD) from RM3 billion at end-2020, group managing director and group chief executive officer Datuk Khairussaleh Ramli said.
He said the commitment grew through its core business activities via lending, capital markets advisory and investment activities, constituting around 20 per cent, 30 per cent, and 50 per cent respectively of the banking group’s green portfolio.
“This is in line with our sustainability framework, which outlines approach towards embedding sustainable practices into business and operations,” he said at the virtual RHB environmental, social and governance (ESG) Forum-Envisioning a Better Future today.
Khairussaleh said 2020 was a year where ESG issues, sustainable finance and investment were given a lot of focus and RHB Group is now starting to see ESG matters being further integrated into investment and corporate strategy as well as evaluation and decision-making process.
“ESG-centric funds are also growing steadily as investors begin to have good appreciation and understanding of the critical needs to ensure that we combat climate change and achieve the United Nations Sustainable Development Goals,” he said.
He said Bursa Malaysia is taking the lead in driving the ESG progress since 2014 through the launch of FTSE4Good Bursa Malaysia (F4GBM) Index, whereby it has directly encouraged more active participations by listed companies, with the constituents increasing to 76 companies.
“The successful implementation of ESG initiative has also shown that business improve their competitive advantage through the enhancement in their corporate performance and governance to become more attractive to institutional investors which is crucial for public companies,” he said.
He said as a financial institution, RHB Group is mindful that failure to recognise and manage climate and environmental-related risks would lead to substantial financial consequences.
Khairussaleh said RHB Group is also committed to supporting green financing, following the launch of three ESG-themed funds (SRI-qualified funds) by RHB Assets Management this year, with a combined Sustainable and Responsible Investment (SRI) assets under management of RM760 million.
“We are planning to launch another two similar funds before the end of this year,” he said.
Moving forward, he said as part of the wider effort to align with RHB sustainability framework, the group would focus on the opportunity for clean and green energy and green financing, effective 2022.
He said the banking group would not be pursuing opportunities or provide financing for any new coal-fired power plants project or related activities.
“We look forward to increasing our engagement with our clients to advocate and nurture the integration of sustainable practices into their business operations,” he said.
RHB has improved its S&P Global ESG Score to 43 in 2020 from 23 in the previous year and remains a constituent in the F4GBM Index as of June 2021, as well as maintaining an AA rating (Leader) for MSCI ESG Ratings. –