RHB sets its sights on net zero by 2050

RHB Banking Group (RHB) managing director and chief executive officer Mohd Rashid Mohamad and RHB group chief sustainability and communications officer Norazzah Sulaiman speaking to members of the media at RHB’s inaugural Sustainability Media Day on April 18 this year.

PETALING JAYA: RHB Banking Group (RHB) is charting a bold course towards a climate-positive future by unveiling a comprehensive pathway to achieve net zero emissions by 2050.

This ambitious goal aligns RHB with the Association of South-East Asian Nation’s (Asean) just and responsible transition to a low-carbon economy. Leveraging its ‘5-Year Sustainability Strategy and Roadmap (2022-2026)’, RHB strengthens its climate commitment by establishing a new Pillar 2, ‘Committed to Achieving Net Zero by 2050’.

This pillar expands upon the group’s existing climate focus, outlining focus areas: Reduction of financed emissions; driving growth in green financial services and supporting companies committed to carbon neutrality; and integration of sustainable and low-carbon practices into its own operations.

RHB’s net zero commitment aligns with Malaysia’s ambition to achieve net zero greenhouse gas (GHG) emissions by 2050, as outlined in the National Energy Transition Roadmap (NETR) and supported by frameworks like the Hydrogen Economy and Technology Roadmap and New Industrial Master Plan 2030 (NIMP 2030).

The group’s net zero commitment acknowledges the financial sector’s crucial role in directing capital towards sustainable and low-carbon activities. RHB has established a three-pronged strategy with clearly defined objectives to translate this commitment into action (See Figure 1).

Strategic objective 1: Reduction of financed emissions in five high-impact sectors within RHB’s business

In developing its net zero commitment, RHB undertook a comprehensive financed emissions baselining exercise in FY2023, establishing a baseline of 9.26 MTCO2e 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 emissions (7.63 MTCO2e).

RHB’s strategy to achieve net zero by 2050 focuses 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.

Strategic objective 2: Driving growth in green financial services and supporting companies committed to carbon neutrality

Strategic objective 2 will complement the first strategic objective as it targets to achieve 40% of the group’s portfolio in green financial services and supporting companies committed to carbon neutrality with a clear and established transition strategy by 2030, with that number rising to 90% by 2050. RHB takes a targeted client engagement approach across varying levels of ESG maturity (Tier 1, Tier 2 and Tier 3 clients) based on their decarbonisation maturity and needs. RHB also leverages on the business and investment opportunities arising from the NETR’s initiatives and enablers.

“Demonstrating our commitment to sustainability, we have cumulatively mobilised RM23.8bil in sustainable financial services by the end of FY2023, exceeding our initial target of RM20bil by 2026. Of this, RM11.3bil was directed towards green activities, including renewable energy projects and energy efficiency solutions, contributing towards our goal of achieving net zero by 2050. Considering our strong achievements to date, we have increased our target to RM50bil by 2026,” said RHB group managing director and group chief executive officer Mohd Rashid Mohamad.

Strategic objective 3: Integration of sustainable and low-carbon practices into RHB’s own operations

RHB has made significant progress towards carbon neutral operations, achieving a 43% reduction in operational GHG emissions against a 2016 baseline, encompassing Scopes 1, 2 and 3 (‘Business Travel by Road and Air’). The group aims to achieve a 45% reduction in operational GHG emissions by 2026 and achieve carbon neutral operations by 2030 through internal initiatives and carbon offsets.

“Our net zero pathway is a commitment to the communities we serve, the environment, and the future, ensuring progress happens for everyone. However, we recognise that our journey to achieving net zero cannot be carried out in silo. We will continue to engage with our clients, business partners, employees, and the broader community to embark on our net zero journey together. We shall also collaborate with governmental bodies, regulatory authorities and other stakeholders in order to create 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,” Mohd Rashid added.

He also added that diversity, equity and inclusion (DEI) will play a big part in their strategy going forward.

“DEI is one of the key pillars within RHB which the management and board takes seriously. We have achieved certain parameters—one of which is exceeding 30% of women representatives in the bank’s senior management and board. “However, DEI is not just about gender. We are looking into other areas within DEI to improve on in the bank,” he noted.

To learn more about RHB’s sustainability initiatives, scan the QR code or download RHB’s latest sustainability report here at https://www.rhbgroup.com/-/media/Assets/Corporate-Website/Document/Annual-Reports/Sustainability-Report/RHB-Bank-SR-2023.pdf

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