CIMB Group Holdings Bhd · MYX:CIMB
CIMB Group Holdings Bhd — Investor Day (September 2021)
58 slides from CIMB Group Holdings Bhd's investor day presentation, Sep 22, 2021
Slide 1: Sustainability Investor Day
Sustainability Investor Day 22 September 2021 FORWARD Sustainability
Slide 2: Agenda
AGENDA 1 Overview of Sustainability at CIMB 2 Sustainability from the Board Perspective 3 Deep Dive 1: Creating Positive Impact Through Sustainable Finance 4 Deep Dive 2: Managing Sustainability and Climate-related Risks 5 Q&A 2
Slide 3: Overview of Sustainability at CIMB
1 OVERVIEW OF SUSTAINABILITY AT CIMB Dato’ Abdul Rahman Ahmad Group Chief Executive Officer • Context and Overview [#] • Our Updated Commitments • Governance and Delivery 3
Slide 4: CIMB at a Glance
CIMB AT A GLANCE Our Purpose To build a high performing sustainable organisation to help advance customers and society One of ASEAN’s Leading Among the largest Asia- One of ASEAN’s Largest World Leader in Islamic Banking Groups based Investment Banks Retail Branch Networks Finance 4
Slide 5: Our Sustainability Journey
OUR SUSTAINABILITY JOURNEY 2007 CIMB Foundation launched • Drive our Corporate Responsibility and philanthropic programmes 2018 Sustainability Strategy Formulation • Held first round of stakeholder engagement and to identify material issues • Embedment of sustainability into core business strategy 1
Slide 6: Why Is Sustainability So Important to Us
WHY IS SUSTAINABILITY SO IMPORTANT TO US We play a pivotal role as a financial institution to create and maximise net positive impact for our stakeholders Our Values Our Business Our Influence Our Stakeholders Simply the right Protects enterprise Financing is central Important to our thing to do – v
Slide 7: Sustainability Is Integrated Into Our Business Strategy
SUSTAINABILITY IS INTEGRATED INTO OUR BUSINESS STRATEGY Vision Vision To be the leading focused ASEAN bank Overall Purpose To build a high performing sustainable organisation to help advance customers and society Strategic Themes 1 Delivering a) Reshape portfolio b) Drive cost efficiency c) Digitise
Slide 8: We Have Built an Integrated Sustainability Roadmap
WE HAVE BUILT AN INTEGRATED SUSTAINABILITY ROADMAP THE GROUP OUR CLIENTS SOCIETY Governance and Risk Sustainable Sustainable Business Corporate Social How we govern and report sustainability Action Responsibility risks at CIMB, including setting targets and How we generate tolerance levels, and how
Slide 9: Our Approach to Sustainability
OUR APPROACH TO SUSTAINABILITY Integrate economic, environmental, and social considerations in all business decisions Strategic philosophy e.g. Prevent and minimise environmental harm, respect human rights, as well as promote social equality and equity Reduce Footprint Increase Handprint (minimise n
Slide 10: Overview of Sustainability at CIMB
1 OVERVIEW OF SUSTAINABILITY AT CIMB Dato’ Abdul Rahman Ahmad Group Chief Executive Officer • Context and Overview [#] • Our Updated Commitments • Governance and Delivery 10
Slide 11: Our Existing Commitments and the Process We Went Through
OUR EXISTING COMMITMENTS AND THE PROCESS WE WENT THROUGH Our existing commitments • 10% reduction of Scope 1 & 2 GHG emissions Benchmarking Feasibility Revised from 2019 baseline Study Study commitments • RM10 billion Green, Social, Sustainable Impact Products and Services (GSSIPS) loan/financing •
Slide 12: Commitment 1: Transitioning to Net Zero
COMMITMENT 1: TRANSITIONING TO NET ZERO Headline Commitment Our Plan Develop a targeted plan to accelerate transition to Net Zero, covering five strategic areas, i.e. Governance, Risk Management, Achieve net zero Client Solutions, Operations, and Transparency & Partnerships operational GHG emissions
Slide 13: Commitment 2: Minimising Harm
COMMITMENT 2: MINIMISING HARM Headline Commitment Our Plan Prohibit asset-level or general corporate financing for new thermal coal mines and coal-fired power plants, as well as expansions, except where there is an existing commitment No financing of new coal and to exit coal by 2040 Implementation
Slide 14: Commitment 3: Maximising Positive Impacts
COMMITMENT 3: MAXIMISING POSITIVE IMPACTS Headline Commitment Our Plan Via our Green, Social, Sustainable Impact Products and Services (GSSIPS) framework to facilitate a just transition to a low-carbon economy and promote an equitable society Mobilise RM30 billion towards Corporate Banking and Comme
Slide 15: Commitment 4: Creating Social Impact
COMMITMENT 4: CREATING SOCIAL IMPACT Headline Commitment Our Plan To enrich communities around us with initiatives and interventions that are impactful in 4 key impact areas: Invest RM150 million over 5 years and 100,000 hours Education annually by 2024 in employee volunteerism activities to positiv
Slide 16: Summary of CIMB's Sustainability Commitments
SUMMARY OF CIMB’S SUSTAINABILITY COMMITMENTS Be a sustainability leader in ASEAN Top quartile of the Dow Jones Sustainability Index (DJSI) by 2024 Climate Change Responsible Banking Social Impact No financing of new coal 1 and to exit coal by 2040 2 4 Minimise Achieve net zero operational Invest RM1
Slide 17: Overview of Sustainability at CIMB
1 OVERVIEW OF SUSTAINABILITY AT CIMB Dato’ Abdul Rahman Ahmad Group Chief Executive Officer • Context and Overview [#] • Our Updated Commitments • Governance and Delivery 17
Slide 18: Sustainability Governance Framework
TO DELIVER, WE HAVE FORMULATED A ROBUST SUSTAINABILITY GOVERNANCE FRAMEWORK • Ultimate accountability for all sustainability elements including climate change Group Board of Directors • Sustainability elements embedded into Audit Committee, Board Risk and Compliance Board Committee, Group Nomination
Slide 19: We Will Continue to Collaborate With Partners
WE WILL CONTINUE TO COLLABORATE WITH PARTNERS CIMB is a founding member and the first ASEAN We are an official supporter of signatory TCFD. By 2023, we are Commitment: committed to fully align with • Commit on the six Principles that align banks with the TCFD principles along with SDGs and the Paris
Slide 20: Delivering on Our Commitments
DELIVERING ON OUR COMMITMENTS Diving deeper into how we will deliver our commitments: CONCLUSION ON OUR RATIONALE AND APPROACH Teoh Su Yin • We recognise our responsibility towards a better common Sustainability from the future Board Perspective Gurdip Singh • As a financial intermediary, we have a
Slide 21: Sustainability from the Board Perspective
2 SUSTAINABILITY FROM THE BOARD PERSPECTIVE Teoh Su Yin [#] Chairperson of the Group Sustainability and Governance Committee and Senior Independent Director of CIMB Group Holdings Berhad 21
Slide 22: How We Govern and Operationalise Sustainability at CIMB
HOW WE GOVERN AND OPERATIONALISE SUSTAINABILITY AT CIMB Group Board of Directors Group Group Group Transformation Nomination Board Risk Sustainability Group Chief Executive Council (GTC) Audit and and Officer and Committee Remuneration Compliance Governance Committee Committee Committee Group Chief
Slide 23: Deep Dive 1: Creating Positive Impact Through Sustainable Finance
3 DEEP DIVE 1: CREATING POSITIVE IMPACT THROUGH SUSTAINABLE FINANCE Gurdip Singh Sidhu [#] Group Chief Sustainability Officer 23
Slide 24: We Effect the Greatest Impact in Work With Clients
WE EFFECT THE GREATEST IMPACT IN THE WORK WE DO WITH OUR CLIENTS THE GROUP OUR CLIENTS SOCIETY Governance and Risk Sustainable Sustainable Business Corporate Social How we govern and report sustainability Action Responsibility risks at CIMB, including setting targets and How we generate tolerance le
Slide 25: Sustainable Finance at CIMB
SUSTAINABLE FINANCE AT CIMB MAXIMISING MINIMISING POSITIVE IMPACT HARM Key Themes and Focus Transaction Level • Our focus is guided by the set of prioritised • Assess every new financing or capital raising request via SDGs that we have identified and integrated Basic or Enhanced Sustainability Due D
Slide 26: How We Affect Change and Resulting Impact
HOW WE AFFECT CHANGE AND RESULTING IMPACT OF OUR EFFORTS Key themes and focus How we affect change Impact we create A • SME RE Financing 1 Enable new and existing Products • SDG Bonds clients to invest and grow in • Sustainability linked loans areas that make a difference Provide clients with the to
Slide 27: GSSIPS Framework Acts as Our Anchor
GREEN, SOCIAL & SUSTAINABLE IMPACT PRODUCTS & SERVICES (GSSIPS) FRAMEWORK ACTS AS OUR ANCHOR The framework is EXPANDABLE, where Priority SDGs new focus areas, products or services can be added/removed as and when required Process Improvements Climate Solutions Energy Green Circular Resource Green Ca
Slide 28: Commitment 3: Maximising Positive Impacts
COMMITMENT 3: MAXIMISING POSITIVE IMPACTS Sustainable Finance commitment of RM30 billion by 2024 Headline Commitment Our Plan A Financing and supporting our clients as Corporates they transition to a low carbon economy Sovereigns / GLCs, Facilitating and arranging for bonds/sukuk, Large corporat
Slide 29: Sustainable Offerings: For Corporates
SUSTAINABLE OFFERINGS For Corporates • Financing for initiatives that provide environmental benefits e.g. Green Financing reduce GHG, reduce air / water / land pollution, improved efficiency in land use and resources • Loans with interest rebates tied to achievement of ambitious, Sustainability Link
Slide 30: Sustainable Offerings: Corporate Clients Examples
SUSTAINABLE OFFERINGS Corporate clients: Select examples Products/ Products/ Services Sustainability Linked Loan Services Sustainability Bond / Sukuk Incentivises borrowers to achieve Sustainability Instruments where proceeds are used to finance or Objectives Performance Targets which are material a
Slide 31: Sustainable Offerings: For SMEs
SUSTAINABLE OFFERINGS For SMEs • CIMB is a financing partner to PFAN, who provides coaching to Private Financing Advisory Network (PFAN) renewable energy, clean technology and energy efficiency project developers • Microfinancing for farmers in MDEC’s eLadang programme, to AgTech Chilli Planters Mic
Slide 32: Sustainable Offerings: SME Clients Examples
SUSTAINABLE OFFERINGS SME clients: Select examples Products/ MicroBizReady Products/ GreenBizReady Services Services Mentoring and education support to B40 Proposition designed to facilitate access to entrepreneurs to facilitate business growth sustainability services for SMEs through Objectives dur
Slide 33: Sustainable Offerings: For Individuals
SUSTAINABLE OFFERINGS For Individuals Green and Socially-Responsible Products • Preferential rates to customers purchasing green residential Green Homes Preferential Pricing properties, with RM211 million financing accepted in 1H 2021 • Preferential rates to customers purchasing green/hybrid Green/H
Slide 34: Sustainable Offerings: Financial Access and Inclusion
SUSTAINABLE OFFERINGS For Individuals Financial Access and Inclusion • Savings account opened and operated completely online within OctoSavers Savings Account 10 minutes, removing the need for customers to go to branches, and reducing paper and need for travel (carbon footprint) • Offer savings acco
Slide 35: Sustainable Banking Products: Individual Customers Examples
SUSTAINABLE BANKING PRODUCTS Individual customers: Select examples Products/ Financing for Green Homes Products/ EcoSave Savings Account-i Services Services CIMB encourages our clients to opt for A sustainability-focused savings product that enables sustainable choices customers to support impactful
Slide 36: Key Achievements in Sustainable Finance
KEY ACHIEVEMENTS IN SUSTAINABLE FINANCE CIMB is a champion in the ESG space as evidenced by our landmark financing deals and bond/Sukuk issuances in the region as well as through our commitment to global and local partnerships for impact financing Trust Certificates Lead Manager, Bookrunner, Trust C
Slide 37: Deep Dive 2: Managing Sustainability and Climate-related Risks
4 DEEP DIVE 2: MANAGING SUSTAINABILITY AND CLIMATE-RELATED RISKS Luanne Sieh [#] Head of Group Sustainability • Managing E&S risks at the transaction and client level • Our climate strategy and managing climate risks at the portfolio level 37
Slide 38: Sustainability Risk Integration Into Group Framework
SUSTAINABILITY RISK INTEGRATION INTO GROUP FRAMEWORK A material risk, integrated into the Group Enterprise Wide Risk Management Framework Risk of financial and non-financial impact arising from EES issues stemming from transactions and/or activities associated with: Sustainability Risk • a business
Slide 39: CIMB's Sustainability Risk Management Framework
CIMB’S SUSTAINABILITY RISK MANAGEMENT FRAMEWORK Governing and managing our sustainability risks Group Sustainability Offer sustainability oversight and guidance at 6-year Guide implementation of various sustainability & Governance board level (supported by other board Sustainability projects or init
Slide 40: Deep Dive 2: Managing Sustainability and Climate-related Risks
4 DEEP DIVE 2: MANAGING SUSTAINABILITY AND CLIMATE-RELATED RISKS Luanne Sieh [#] Head of Group Sustainability • Managing E&S risks at the transaction and client level • Our climate strategy and managing climate risks at the portfolio level 40
Slide 41: Group Sustainable Financing Policy (GSFP)
GROUP SUSTAINABLE FINANCING POLICY (GSFP) Mitigating E&S risks at the transaction and client level in our business financing Scope and Coverage: • Applicable to both financing and investment banking deals for CIMB’s clients • Require sustainability due diligence to be undertaken on non-SME borrowers
Slide 42: Environmental & Social Risks Assessed
ENVIRONMENTAL & SOCIAL RISKS ASSESSED Risks are assessed based on ‘outbound’ and ‘inbound’ impacts Biodiversity loss High rates of energy use Water scarcity Deforestation Marine environment Climate change Waste and pollution Environmental Risks Social Risks Human rights and Health and safety labour
Slide 43: Commitment 2: Minimising Harm
COMMITMENT 2: MINIMISING HARM Deepening sustainable finance risk commitments to include NDPE • No financing of new coal •No Deforestation, No Peat NEW • To exit coal by 2040 •No Exploitation • No new or expansionary thermal coal mining • Support sustainable Palm Oil, requiring MSPO/ ISPO/ RSPO and c
Slide 44: Highlights of Sector Requirements
HIGHLIGHTS OF SECTOR REQUIREMENTS Instituting key controls for sector-specific issues Sector Guides Three categories have been defined to guide CIMB’s decision making process: Palm Oil • Expect – Minimum requirements that clients must meet to Oil & Gas have satisfied CIMB’s expectations in terms of
Slide 45: Portfolio Exposure to High Sustainability Risk Sectors
PORTFOLIO EXPOSURE TO HIGH SUSTAINABILITY RISK SECTORS Data at as June 2021 across the Group Palm: 3.0% Forestry: 0.7% Oil & Gas: 2.5% Trading Trading Downstream 10.7% 7.8% 51% Forestry 2.7% Manufacturing Pulp and 25.1% Paper 59.2% Planting Support Wood & Wood 67.1% activities Extraction Products 44
Slide 46: Examples of Client Engagements
EXAMPLES OF CLIENT ENGAGEMENTS Advocating for change through direct and open communication Sector #1: Logging Sector #2: Rubber Glove Sector #3: Companies Manufacturers Oil Palm Planters • Clients’ commitment to Free, Prior and Informed Consent • Adoption of national certification Engagement (FPIC)
Slide 47: Enhanced Sustainability Due Diligence Outcomes
ENHANCED SUSTAINABILITY DUE DILIGENCE OUTCOMES Case summary as at July 2021 Not Recommended Recommended with Recommended with Not Recommended (1%) Action Plan (12%) Action Plan (12%) (1%) 80% of due action plans completed Recommended Recommended (87%) (87%) Recommended with Recommended with Action P
Slide 48: Deep Dive 2: Managing Sustainability and Climate-related Risks
4 DEEP DIVE 2: MANAGING SUSTAINABILITY AND CLIMATE-RELATED RISKS Luanne Sieh [#] Head of Group Sustainability • Managing E&S risks at the transaction and client level • Our climate strategy and managing climate risks at the portfolio level 48
Slide 49: Commitment 1: Net Zero Operational GHG by 2030 and Net Zero by 2050
COMMITMENT 1: NET ZERO OPERATIONAL GHG (SCOPE 1 & 2) EMISSIONS BY 2030 AND NET ZERO BY 2050 Pillar 1 Pillar 2 Pillar 4 THE GROUP OUR CLIENTS Governance and Risk Sustainable Sustainable Business • Ensure effective climate governance at board Action and management levels • Ensure effective identificat
Slide 50: Pillar 1: Operational Emissions
PILLAR 1: OPERATIONAL EMISSIONS Zeroising GHG Scope 1 & 2 Emissions by 2030 Key levers Examples of initiatives Estimated reduction emissions GHG reductions relative to baseline, ‘000 tonnes • Operational changes involving reduction of floor Long Term Business spaces in head offices and number of bra
Slide 51: Pillar 2: Financed Emissions
PILLAR 2: FINANCED EMISSIONS Reducing financed emissions to achieve Net Zero by 2050 Key levers Examples of initiatives/measures Short term Key Steps to Moving Towards Net Zero • Undertake client engagements, e.g. leverage Discourage 1 sector guide requirements such as NDPE to harmful practices pers
Slide 52: Pillar 4: Assessing Climate-related Financial Risks
PILLAR 4: ASSESSING CLIMATE-RELATED FINANCIAL RISKS Qualitative climate-related risk assessment SOURCES OF RISK POTENTIAL TRANSMISSION CLIMATE-RELATED CHANNELS FINANCIAL RISKS Lower corporate profitability and increased litigation Corporate devaluation or Policy and Technology Credit Risk Market Ris
Slide 53: Pillar 4: Portfolio-level Climate Risk Assessment
PILLAR 4: PORTFOLIO-LEVEL CLIMATE RISK ASSESSMENT Piloting transition and physical risk scenario analysis Transition Risk Arising from policy, regulatory and technological adjustments made to transition to the low-carbon economy Pilot Project #1: Paris Agreement Capital Transition Pilot Project #2:
Slide 54: Pillar 5: CIMB's TCFD Commitment & Plan
PILLAR 5: CIMB’S TCFD COMMITMENT & PLAN Targeted for full TCFD alignment for annual reports issued for YE 31 December 2023 Component What Have We Done? What Needs to be Deepened? Governance • Group Sustainability and Governance Committee • Consistently communicate & discuss climate change across set
Slide 55: Pillar 5: Climate-related Partnerships
PILLAR 5: CLIMATE-RELATED PARTNERSHIPS Joining forces with banks and other partners to advance climate agenda Measurement of Disclosures Commitment to Act and Shared Learning Financed Emissions • Align our lending and • Transition all operational • Measure and disclose • Take action to build a inves
Slide 56: Wrap Up
WRAP UP Gurdip Singh Sidhu Group Chief Sustainability Officer [#] 56
Slide 57: Key Achievements and Recognition
KEY ACHIEVEMENTS AND RECOGNITION We have steadily improved our performance on sustainability indices and benchmarks 2024 Target: Top Quartile Financial Percentile Rank Percentile ESG Rating SUSBA score Sustainalytics globally on the year (max. 100) Rank (max. 10) (max. 70) ESG Risk Rating Dow Jones
Slide 58: Concluding Thoughts
CONCLUDING THOUGHTS Why and How What Who Rationale and Approach Commitments and Progress Working with Stakeholders We recognise our We have established a solid We took a partnership and learn responsibility towards a better foundation and have made significant from others approach from the com
CIMB Group Holdings Berhad — Investor Day (September 2021) on 6ix