Malaysia’s CIMB to phase out coal financing by 2040

Asset-level or general corporate financing will be prohibited for new thermal coal mines and coal-fired power plants, as well as expansions of the projects

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Malaysia’s CIMB has made a commitment to phase out coal from its portfolio by 2040, claiming to be the first banking group in the country and Southeast Asia to do so.

It has launched its first ‘Coal Sector Guide’, which sets out its ambition as part of its effort to align with the 1.5C goal of the Paris climate change agreement.

It prohibits asset-level or general corporate financing for new thermal coal mines and coal-fired power plants, as well as expansions of the projects, except where there is an existing commitment.

The Guide also sets out the expectation for companies such as electricity utilities that rely on coal as a fuel source to provide a diversification strategy to reduce the share of coal in their power mix.

Datuk Mohd Nasir Ahmad, Chairman of the CIMB Group said: “We are pleased to announce our Coal Sector Guide as the next major milestone in our sustainability journey and part of our commitment to intensify our efforts on two fronts: grow our positive impact finance and enable a just transition to a climate-compatible future.

“As a founding member of the United Nations Environment Programme Finance Initiative (UNEP FI) Principles for Responsible Banking and in line with the Collective Commitment to Climate Action (CCCA), CIMB firmly believes that profit and purpose are inextricably linked. As such, we are working towards announcing more sustainability-related measures, in particular with respect to our positive impact financing target, as we continue to address climate change and the other pressing issues facing society today.”