MBSB Bank has commenced developing a sustainability framework, highlighting the bank’s commitment to driving Malaysia’s sustainability agenda. The framework will provide it with a guided and holistic approach to ESG identification, measurement, management and reporting. The announcement solidifies the bank’s commitment to sustainability following its sustainable Sukuk issuance earlier this year in February.
“We are progressing to adopt sustainability initiatives within the workplace among our employees. We have commenced with the development of a sustainability framework to guide and drive strategic management and reporting of sustainability plans and initiatives and embed sustainability governance and policies within the operations of the group. We target our green financing disbursement to hit RM700 million (US$158.93 million) by 2025,” Nor Azam, acting CEO of MBSB Bank, commented.
The bank has played an instrumental role in the Malaysian domestic Islamic sustainable finance space, issuing the first sustainability Sukuk for a Malaysian Islamic bank in February 2022. The RM300 million (US$68.49 million) issuance was received positively by the market with a bid to cover ratio of 10 times.
Additionally, it is one of the first few local banks to begin the development of the Scope 3 financed emissions baseline. Measuring financed emissions will allow the bank to make transparent climate disclosures on its greenhouse gas emissions exposure, enabling it to identify climate-related transition risks and opportunities, and set baseline emissions for future target-setting.
While the sustainability framework is still in the developmental stage, the bank issued a sustainability Sukuk framework in relation to its Sukuk issuance which was assigned a ‘Silver’ sustainability Sukuk assessment rating by the Malaysian Rating Corporation. The rating agency viewed that the projects under the framework have the potential to facilitate adjustments toward a more sustainable development trajectory and to meaningfully advance national-level SDGs. We may see this trend continue in the bank’s upcoming sustainability framework.