This article first appeared in The Edge Malaysia Weekly on November 13, 2023 - November 19, 2023

RHB Bank Bhd seems well on track to achieve its aim to mobilise RM20 billion in sustainable financial services by 2026, having already hit RM12 billion in sustainable financial services as at December 2022, exceeding its year-to-date target by more than 40%.

RHB’s commitment to stakeholder value creation through responsible banking decisions helped make the group a joint winner of The Edge Billion Ringgit Club’s Best CR Initiatives Award for Big Cap Companies of RM10 billion to RM40 billion market capitalisation.

The banking group, which also aims to empower more than two million targeted individuals by 2026, initialised the second phase of its sustainability journey with the launch of its Sustainability Strategy and Roadmap in February 2022. That lays out a clearer framework as financial institutions step up environmental, social and corporate governance (ESG) integration and climate risk mitigation efforts.

RHB’s journey towards carbon-neutral operations by 2030 and net zero by 2050 was also refined with the launch of its Climate Action Programme in the first quarter of 2022.

Enhancements to its climate risk management practices and the development of expertise in managing climate-related risks include integrating Bank Negara Malaysia’s Climate Change and Principle-based Taxonomy into the group’s risk management process.

RHB formally embarked on its sustainability journey in 2018 and institutionalised the Group Sustainability Framework in the following year. It also revealed that it adopted a high level of transparency in its sustainability disclosure. RHB produced its first sustainability report for the financial year 2017, admitting it as a constituent of the FTSE4Good Bursa Malaysia Index for FY2016. RHB is still a constituent of the FTSE4Good Bursa Malaysia Index.

Meanwhile, RHB’s community empowerment and enrichment programmes aim to nurture future generations and communities across Malaysia and Asean, zeroing in on small and medium enterprises, micro-SMEs, youth and the young-to-workforce with targeted financial products and services, skills development and financial literacy initiatives. This is evident through initiatives such as RHB Money Ma$ter programme, RHB X-Cel Academic Excellence programme and other campaigns aimed at improving the financial ecosystem for students and facilitating cashless campuses.

“SMEs make up more than 90% of all businesses in Malaysia and contribute to about 50% of the country’s gross domestic product. Studies also show that smaller businesses generate approximately 60% to 70% of industrial emissions.

“It is therefore important for us to support SMEs in skills building and to facilitate their low-carbon transition. [Therefore], our key focus for FY2023 will be to kick-start our programme by nurturing and supporting our SME customers towards integrating sustainable practices into their businesses and operations. This will be delivered through awareness programmes, advisory services and product offerings,” RHB said in its 2022 annual report.

As part of the group’s financial inclusion initiatives, the My First Home Scheme was introduced to first-time homebuyers with a monthly income of up to RM10,000 for the chance to own a home. Another flagship programme that was introduced by the group in the second half of FY2022 was RHB #JomBiz, an upskilling programme for Bottom-40 micro-SMEs, which benefited more than 140 participants.

Critical to the success of RHB’s sustainability journey is a robust governance structure that ensures effective implementation of its key sustainability focus areas. Towards this end, a four-person board sustainability committee was established in August 2022 to assist the group’s board of directors in providing strategic oversight of the group’s long-term corporate strategy and decision-making process.

Last year, the group also issued the RHB Group ESG Eligible Business Activities Guidelines to facilitate the classification of green, social and sustainable financing; promote clarity and ease of tagging; and support the group’s commitment. RHB’s collective efforts where ESG was concerned improved its position in the S&P Global ESG scoring from 47 to 49.

RHB was rated in the top 25% by ESG Ratings among public-listed companies in FTSE Bursa Malaysia EMAS Index and maintained an AA rating in MSCI ESG Ratings.

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