KUALA LUMPUR (June 27): CIMB Islamic Bank Bhd has onboarded MTT Shipping Sdn Bhd (MTT Shipping) to its sustainability-linked treasury programme. 

In a statement on Tuesday (June 27), the bank said MTT Shipping is its first client to utilise the programme with shariah-compliant hedging instruments was formed.

CIMB said that since December 2022, the programme offers long-term solutions to clients with strong environmental, social and governance (ESG) aspirations.

It said the programme encompasses recurring flow transactions such as imports and exports for clients’ business cycles, episodic balance sheet hedging and risk provide management solutions.

Under the programme, MTT Shipping is entitled a sustainability-linked reward contingent to the sustainability performance targets which are prone to strict independent third party verification.

CIMB Islamic chief executive officer Ahmad Shahriman Mohd Shariff highlighted the bank's commitment to generate long-term positive impacts and product innovation to the economy, community and environment with value-based intermediation (VBI) principles. 

"The organisation will strive to meet our clients’ treasury requirements through bespoke treasury solutions that further contributes in ESG," he said.

Meanwhile, MTT Shipping executive chairman Datuk Seri Kenny Ong said the company added that the deal emphasised its commitment to integrating ESG considerations into its corporate roadmap and generating sustainable long-term value for stakeholders.

“In recent years, there is an increase in ESG regulations in the transport industry and we strive to ensure our operations and decision-making processes align with the policy requirements set by the International Maritime Organisation (IMO). This includes managing carbon intensity indicator (CII) ratings in our vessels while aligning our emissions reduction trajectory with the IMO," he said

In line with its Forward23+ strategic plan, CIMB has executed several sustainable financing transactions, including its landmark sustainability-linked derivative (SLD) in October 2021, the world’s first ringgit-denominated SLD transaction. In 2022, the group doubled its sustainable finance target to RM60 billion by 2024 after having met its original target of RM30 billion two years ahead of schedule.