The CIMB Group defines sustainable finance through their thoroughly crafted sustainable finance framework. It follows the sustainability commitment and defines sustainable finance from two angles: maximising positive impact and minimising harm.
Arshad Nuval Othman, the Head of Sustainable Finance in CIMB Islamic, spoke eloquently at ICW 2023 held at MITEC, Kuala Lumpur, from 14-17 November, and said there is one particular high-risk sustainability sector, none other than the construction and infrastructure that requires close check towards going sustainable.
CIMB has a framework called Green, Social, Sustainable Impact Products and Services (GSSIPS) to maximise positive impact. This helps them connect and work with clients on sustainable business opportunities. The GSSIPS framework highlights green buildings and affordable housing that are highly relevant to the construction sector when applying sustainability.
Affordable housing refers to affordable residential units for low to moderate-income individuals or families. The goal is to provide decent and safe housing options for people who may otherwise struggle to afford housing in the regular market.
Governments, financial institutions, and private organisations often collaborate to create initiatives and frameworks to promote affordable housing. These initiatives may include subsidies, tax incentives, or partnerships with developers to build affordable housing projects.
Other than that, green buildings focus on minimising their environmental impact throughout their lifecycle. This includes construction, operation, maintenance, renovation, and demolition. Green building practices promote energy efficiency, water conservation, use of sustainable materials, and overall environmental responsibility.
Certifications like LEED (Leadership in Energy and Environmental Design) are commonly used to evaluate and recognise green buildings. These certifications provide a framework for sustainable building practices.
“Offering various sustainable products and services, there are the primary sustainable CIMB services: the dedicated purpose or use of Proceeds, where each dollar or ringgit borrowed will go to green building or affordable housing projects. The second would be Transition or Sustainability-Linked Financing, which goes to the general funding of projects but with a twist of additional sustainability key performance indicators, such as lowering the company’s greenhouse gas emissions for the next five years,” said Arshad.
