RHB ups its sustainable financial service target

CEO Mohd Rashid said RHB will continue to drive growth in green financing.

PETALING JAYA: RHB Bank Bhd is targeting to increase its 2026 sustainable financial services from RM20bil to RM50bil after recording strong achievements in the area.

In a statement, group managing director and chief executive officer Mohd Rashid Mohamad said with the aim to demonstrate commitment towards sustainability, the bank had collectively mobilised RM23.8bil in 2023, exceeding the initial target of RM20bil by 2026.

According to Mohd Rashid, RM11.3bil was utilised for green activities, including renewable energy projects and energy efficiency solutions.

The bank developed a three-pronged strategy to work towards, which included undertaking a comprehensive financed emissions baselining exercise in financial year 2023, establishing a baseline of 9.26 tonnes of carbon dioxide equivalent for total financed emissions as at Dec 31, 2022.

“Recognising that some sectors contribute more significantly, RHB prioritises five high-impact sectors: energy supply, palm oil, oil and gas, property and construction and transportation.

“These sectors represent nearly 60% of the group’s financial exposure and over 80% of financed emission,” it said.

Furthermore, it added that the net-zero goal by 2050 will focus on reducing the financed emissions arising from these five high-impact sectors.

“By 2030, RHB aims to achieve a 20% reduction in these sectors. By 2050, RHB’s goal is to accomplish up to 96% reduction in financed emissions across these sectors,” it noted.

RHB also noted it has made significant progress towards carbon-neutral operations and has achieved a 43% operational greenhouse gas (GHG) emissions against a 2016 baseline, encompassing Scopes One, Two and Three (business travel by road and air).

Accordingly, it will aim to achieve a 45% reduction in operational GHG emissions by 2026 and achieve carbon-neutral operations by 2030 through internal initiatives and carbon offsets.

“We recognise that our journey to achieving net-zero cannot be carried out in silos.

“We will continue to engage with our clients, business partners, employees and the broader community to embark on our net-zero journey together,” Mohd Rashid said.

“We will also collaborate with governmental bodies, regulatory authorities and other stakeholders to create a scalable impact, while at the same time, be guided on the progress and development of government policies, directives and incentives towards achieving our net-zero 2050 commitment.”

Separately, in its latest annual report, RHB acknowledged that the banking sector also made progress towards aligning business operations with environmental and sustainability goals.

“This includes considering the associated environmental impacts from lending decisions and expanding green financial solutions that support customers’ transition towards more sustainable practices.

“Addressing data needs and building capacity in climate risk management will be an ongoing focus for banks to meet climate goals and support transition activities, among other things.”

In the same report, Mohd Rashid said RHB will continue to drive growth in green financing and support projects that facilitate the transition to renewable energy and low-carbon practices.

“We will also step up our efforts to support companies committed to carbon neutrality with a clear and established transition strategy. This proactive initiative will involve even more companies in transitioning to a low-carbon economy,” he said.