Sustainable & Responsible Finance

Managing E&S Risks in Financing Transactions​

We work closely with our clients to manage and mitigate their environmental and social risks and encourage them to shift towards more resilient and sustainable business models. Through sustainable and responsible financing practices, we are helping to protect our customers, business and the financial system as a whole. ​

Group Sustainable Financing Policy

The Group Sustainable Financing Policy (GSFP) governs the handling of environmental and social risks in non-retail financing and capital raising transactions. The GSFP enables CIMB to make informed decisions aligned to our values and aspiration to provide responsible and sustainable financial services.

Through the GSFP, the Group identifies, assesses, and manages risks arising from financing clients and sectors that have the most impact on, and are most vulnerable to, environmental and social risks.​

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Key elements of GSFP are: ​

• Exclusion List specifies the activities which the Group will not be associated with​.

• Sustainability Risk Assessment outlines how and when sustainability due diligence will be carried out for existing and potential clients​.

• High Sustainability Risk Sector List outlines the sectors identified as having high current or potential environmental and social risks. This list further outlines specific requirements to engage with clients from these sectors​.

• Escalations and Sustainability Action Plans. In instances where significant risks remain unaddressed, an action plan can be proposed to the client.  These action plans are diligently monitored and governed by specific conditions to ensure effectiveness and compliance​.

High Sustainability Risk Sectors

We take a structured and inclusive approach to establish our risk appetite and requirements for high sustainability risk sectors. We reference global and local standards and engage with internal and external stakeholders as part of the development of the risk appetite. We have identified over 140 sub-sectors within ten main industries that are classified as high sustainability risk sectors. These sub-sectors are regularly updated based on global frameworks. ​

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In addition, we have developed seven Sector Guides that cover palm oil, forestry, oil and gas, construction and infrastructure, coal, mining and quarrying, and manufacturing sectors. Clients are to meet required standards of the sector guide, avoid prohibited activities, and encouraged to adopt higher sustainability practices.​

Sustainability Due Diligence Process

Under the GSFP, sustainability risk in specific financing decisions is assessed and managed through a structured, risk-based due diligence process. In considering the risks arising from our financing exposure, we assess: ​

• Client Risk Assessment: The entity’s sustainability credentials, including policies, commitments, and track record.​

• Transaction Level Risk Assessment: The intended use of proceeds, and potential environmental and social impacts. ​

Basic Sustainability Due Diligence​

All companies that CIMB does business with are subjected to Basic Sustainability Due Diligence (BSDD) by the relationship managers. The purpose is to ensure that we are aware of any potential adverse environmental and social risks that a client is engaged in. 

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The BSDD encompasses basic checks on exposure to, and links with environmental and social risks or incidence in the past three years. This is done through a review of news reports and credible sources.​

Enhanced Sustainability Due Diligence​

The Group Sustainability team carries out Enhanced Sustainability Due Diligence (ESDD) on clients who fail the BSDD, operate in pre-selected high sustainability risk sectors, do not meet our Sector Guide requirements, or have been identified by reputable sources as being involved in negative environmental or social incidence.  ​

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The ESDD involves an internal analysis conducted by CIMB’s Sustainability team, supplemented by external subject matter expertise where necessary. Our ESDD framework is designed in accordance with internationally acknowledged best practices, as outlined in the UN Environment Programme Finance Initiative (UNEP FI) Environmental and Social Risk Analysis programme and considers the risk implications of large-scale projects.​

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The ESDD report can result in four potential outcomes: ​

• Recommend to Approve​

• Recommended with Action Plans​

• Not Recommended​

• Rejected​