KUALA LUMPUR (Nov 24): CIMB Group Holdings Bhd has announced its 2030 climate targets for its palm oil and power portfolios by focusing on sustainable palm oil production, extending the banking group’s milestone announcement last year of net zero targets for both its thermal coal mining and cement portfolios in pursuit of its overarching 2050 Net Zero commitments.
The group aims to reduce the emission intensity of its palm oil portfolio by 16% from 1.81 tonnes of carbon dioxide equivalent or tCO2e/tCPO in 2022 to 1.52 tCO2e/tCPO by 2030 — which averages to a 2% annual reduction, it said in a statement.
These include Scope 1 and 2 emissions, originating from plantation and milling clients, along with Scope 3 upstream emissions associated with clients’ sourcing of fresh fruit bunches from suppliers.
In line with its Net Zero initiatives, the group has released a comprehensive white paper on its decarbonisation plans that details its sector-specific pathways and immediate plans for the four key sectors that represent around half the group's current emissions.
“We are pleased to present a comprehensive strategy on these sectors, the first in Malaysia, solidifying our commitment towards Net Zero by 2050. We firmly advocate for the sustainable production of palm oil and recognise the crucial role that businesses, including the MSMEs play in advancing towards sustainable palm oil production. We will continue to actively support and enable our clients and small-scale growers to embrace and adopt certified sustainable palm oil standards.
"CIMB is also committed to support decarbonisation in the power sector, leveraging the rapid advancements in renewable energy technologies and supportive national schemes to accelerate the transition to a Net Zero economy," said CIMB group chief executive officer Datuk Abdul Rahman Ahmad.
CIMB plans to engage with its clients to shift their production towards certified sustainable palm oil to minimise environmental impacts, adopt better agricultural practices to increase yields and reduce operational greenhouse gas emissions as well as improve the quality and coverage of emissions reporting.
"In addition, clients are also responsible to ensure that the rights of communities, smallholders, and workers are safeguarded. CIMB is the first bank globally to have announced a science-based Net Zero decarbonisation pathway for the Palm Oil sector. As part of the process, CIMB actively engaged with key industry stakeholders to ensure its plans are reflective of the collective need to move forward in this area," the banking group said.
At the same time, it will work with its power segment clients to accelerate the transition to clean energy production, by leveraging the abundant renewable energy resources in Southeast Asia. It aims to achieve its interim target to reduce the emissions intensity of its power generation portfolio by 38% by 2030, in line with the International Energy Agency’s Net Zero Roadmap.
Following the group’s exit from the thermal coal mining sector in 2021, CIMB has set targets to halve its exposure to the sector by 2030 and phase out coal from its portfolios by 2040. It also aims to reduce the physical intensity of financing clients in the cement sector by 36% by 2030.
Abdul Rahman said the banking group is pleased to have outlined the specific targets for these critical industries and plan to complete the same for other key sectors by early 2024.
In the meantime, it will continue to actively catalyse and drive the adoption of environmentally and socially responsible practices, and share its experiences at the upcoming United Nations Climate Change Conference 2023 or COP28.
The group has also increased its sustainable finance target to RM100 billion by 2024, up from RM30 billion previously announced in 2021, under its Green, Social, Sustainable Impact Products and Services framework.