Helping Malaysian businesses achieve national sustainability goals

Maybank’s sustainable finance team led by Dato’ Fadl Mohamed (centre) and Valerie Ng (second from right)

Industry plays a critical role as an agent of change in driving a nation’s pursuit of sustainable economic growth. While large companies have been proactive in investing in the latest technologies and innovations to meet demands for increased sustainability, small and medium-sized enterprises have been increasingly implementing environmentally responsible practices in-house. needs strategic support to integrate into management.

“Many mid-cap companies are not prepared to prioritize sustainability considerations within their operations simply because they lack the resources beyond financing requirements. “Capacity development is important because the awareness and understanding of how to achieve sustainability may not be the same at all levels within the company.” Dato’ Fadl Mohamed, CEO of Maybank IB, told The Edge.

“As intermediaries in capital markets, investment banks are in a strategic position to foster cross-industry collaboration. By guiding our clients to best practices and avoiding unintended greenwashing, we aim to We can help you improve your financial awareness and preparedness. We support our clients end-to-end, including structuring deals, connecting issuers with ESG investors, and helping them set up sustainable finance frameworks that align with regulatory standards and guidelines. We are the first Malaysian bank to establish a dedicated sustainable finance team to provide guidance at the end of the process and best practices. Our regional sustainable finance teams, which act as sustainability structuring advisors, also support issuers with second opinion providers and best practices. “We will assist in selecting external auditors and coordinate and liaise with these parties to obtain certification, verification and audits,” he added.

Carefully selected sustainability related transactions by Maybank Maybank’s role
Secures S$330 million senior secured sustainability project finance facility for Pengerang Independent Terminals Sdn Bhd Delegated lead arranger, original lender, sole hedge coordinator, financial advisor, sustainability structure advisor
Worldwide Holdings Berhad’s first green syndicated financing of RM999 million for two waste-to-energy projects Financial advisor, sustainability structure advisor, sole coordinating arranger, joint lead arranger, facility agent, Sharia advisor, original lender, account bank
KLK Group’s first sustainability-related loan of RM500 million Head of Finance, Sustainability Structuring Advisor
KPJ Healthcare Berhad’s RM555 million virgin sustainability sukuk wakalah Joint Principal Advisor, Joint Lead Arranger, Joint Lead Manager, Joint Sustainability Structure Advisor, Joint Shariah Advisor

Funding the journey to net zero

According to Bloomberg, moving to net zero by 2050 will require $200 trillion in sustainable financing, which equates to about $6 trillion to $7 trillion per year over the next 30 years. The amount of capital expenditure will vary from country to country depending on where they are in the transition process, but given the high risk of extreme climate change in Southeast Asia and South Asia, the energy transition needs to happen quickly.

Policy instruments are an effective way to facilitate the transition, as seen in the substantial investment cycles in the European Union (EU) and the United States following the implementation of supportive policies to increase the share of renewable energy in the overall energy mix. It can be.

These include the European Green Deal and the EU’s Fit for 55 scheme, which aim to achieve EU climate neutrality by 2050 and reduce greenhouse gas emissions by 55% by 2030, respectively, and the US inflation Includes suppression methods. Reduce inflation by increasing domestic energy production and manufacturing investment and reducing carbon emissions by 40% by 2030.

Other countries benefiting from investments in green energy include the UK, Australia and China.

The impact of these policies will become clear in 2022, when investment in renewable energy exceeds investment in fossil fuels for the first time. This trend is likely to continue, as investments and subsidies related to fossil fuels are expected to continue to decline.

Government-led strategies to drive energy transition

Ten flagship projects of the National Energy Transition Roadmap (NETR). It covers six energy transition instruments: energy efficiency (EE), renewable energy (RE), hydrogen, bioenergy, green mobility, and carbon capture, utilization and storage (CCUS). is an eligible green project that requires significant investment. This creates sustainable financing opportunities that are critical to accelerating the country’s green and sustainable growth agenda, which Maybank actively supports.

Boost the energy sector by, inter alia, rapidly advancing the use of sustainability-supporting financial products and blended financial structures, such as green bonds and sukuk, and attracting private investment, including domestic and international funds and venture capital. We are considering. Efforts are underway to encourage venture capital investment in high-risk, early-stage energy ventures in high-potential sectors, and create opportunities for these companies to contribute to the sustainability ecosystem. It also aims to strengthen the involvement of medium-sized companies.

Additionally, the National Industrial Master Plan 2030 (NIMP) recognizes the transformation of small and medium-sized enterprises to increase sustainability as a key contributor to the country’s net-zero carbon emissions target, and identifies specific challenges. Several frameworks for addressing this are outlined.

There are also various initiatives by regulatory bodies such as Bank Negara Malaysia, Securities Commission Malaysia and Bursa Malaysia to support SMEs and mid-cap companies in their transition to a low-carbon economy and digitalization. RM1.1 billion, SME Automation and Digitalization Facility of RM1.5 billion and Low Carbon Transition Facility of RM1.0 billion (on a like-for-like basis).

To facilitate access to these financing options, the government will coordinate financing between manufacturing and banks, and work with banks to identify viable projects that drive digitalization and decarbonization. We are strengthening banks’ ability to assess and fund technology-focused financial institutions. Innovative ventures may use BNM’s TechUP and GreenUP initiatives for preliminary risk assessment.

As capital market intermediaries, investment banks are in a strategic position to foster cross-industry collaboration. We can increase awareness and readiness for sustainable finance by guiding our clients towards best practices and away from unintentional greenwashing. ”
Dato Fadl Mohammed,

CEO of Maybank Investment Bank Bhd.

turn brown green

Malayan Banking Bhd (Maybank) recently launched the Transition Finance Framework at COP28 in Dubai to lead the transition to a net-zero economy by financing the greening of brown emissions-intensive sectors .

The framework outlines Maybank’s principled and practical approach to classifying and recognizing the lending solutions it provides as reliable transition finance, and is intended to complement the Group’s Sustainable Products Framework. The purpose is The Transition Finance Framework recognizes his three approaches to mobilizing transition finance: the principles-based approach, the eligible activities approach, and the net-zero strategy and essential standards approach.

The framework also recognizes the important role that financial institutions play in the management phase-out of carbon-intensive assets. Key guardrails have been established to ensure a just transition, including clear phase-out timelines, strong quantifiable success metrics, and support for affected workers and communities. , client commitment to transparency, and more.

Ahead of COP28, Maybank, in collaboration with the Institute of International Finance (IIF), held the 1st Transition Finance Workshop in Kuala Lumpur on 30 November 2023. The workshop featured interactive sessions with over 120 participants from prominent regional and local businesses and financial institutions. We will also exchange knowledge to delve deeper into the fundamentals of transition finance, as well as the challenges and opportunities in this field.

These initiatives are part of Maybank’s broader commitment to support net-zero transition in ASEAN through a principles-based and practical approach and encourage industry movement towards sustainable practices.

Promoting sustainable finance through industry collaboration

Regarding Maybank IB, we actively participate in industry-level collaborations and committees. The investment bank is part of Sub-Committee 3: Products and Innovation of the Joint Committee on Climate Change (JC3), a regulated industry platform dedicated to promoting climate change resilience in the Malaysian financial sector. Leads investment banking initiatives aimed at accelerating investment banking. Adopting sustainable financing.

Maybank IB is also a member of the Industry Advisory Panel of the Sustainable Finance Joint Working Group of the ASEAN Capital Markets Development Working Committee (WC-CMD) and the ASEAN Capital Markets Forum (ACMF), and is a member of the working group that produced the White Finance Policy. I am the chairman. The paper entitled “Strengthening supply and demand for sustainable finance”.

Ensuring a just and orderly transition for long-term economic and community resilience requires collaborative efforts among all stakeholders. Maybank IB will continue to support nation building by mobilizing capital and enabling investment to achieve Malaysia’s sustainability goals.

Related Article


Leave a Comment