Sustainable Product Framework Qorus Banking Innovation Awards 2023

The need for a just transition is more evident than ever. As a leading bank in the region, we have a role to play in facilitating a just transition for our clients and our region via the mobilisation of capital to where it is needed most, with a focus on low carbon and innovative solutions. With today’s capital being the key to unlocking tomorrow’s transition, Maybank is well positioned to mobilise capital strategically and shift the region onto a more sustainable development course. The growing concern over greenwashing has been fueled by the lack of a standardized approach towards assessing sustainable finance initiatives. There is a risk of misrepresentation of environmental and social impact across the spectrum of large and small companies.. To that end, Maybank has taken proactive steps, having co-developed the Sustainable Product Frameworks (SPF) with Sustainalytics, proving the integrity of its development approach. To this end, Maybank, the largest financial services group in Malaysia, aims to serve the communities by embodying our mission of Humanising Financial Services. Sustainability in our business has been a driving factor, motivating the development of our M25+ strategy, supported by Maybank’s Sustainability Framework. As part of this strategy, Maybank has committed to mobilising RM80 billion in sustainable financing by 2025. To achieve this, we developed and implemented the SPF, becoming the first Malaysian bank to do so, as we look to elevate our ability to mobilise and take on a leading role in sustainable finance within the region. The SPF, implemented in September 2022, aligns with best practices adopted by global peers, providing guidance for the development of themed Green, Social, Sustainable and Sustainability-linked Products, along with adoption of global standards, including the Green, Social, Sustainability & Sustainability-linked Bond Principles, administered by the International Capital Markets Association (“ICMA”), the ASEAN Green, Social, and Sustainability Bonds Standards, and the Guidelines on Sustainable and Responsible Investment Funds (“SRI Guidelines”), among others. The rollout of the SPF is designed to enable more effective and transparent development of green, social, sustainable, and transition products, and is applicable to all financial products and services that integrate ESG criteria into business or investment decisions. As such, the methodology and procedures are outlined, classifying and reporting financial products as sustainable, as well as detailing eligibility, verification, and exclusion criteria. This serves as the basis for enhanced transparency, tracking and disclosing of progress towards Maybank's commitment of mobilising RM80 billion in sustainable finance by 2025. Guided by the SPF, the Banking Group mobilised over RM6.7 billion in sustainable financing for our retail and non-retail segments between September and December 2022, bringing the total value of sustainable financing mobilised in FY2022 to over RM20 billion across ASEAN - a 51.2% increase from the previous year. Of the RM20 billion mobilised, over RM16 billion was derived from our non-retail segment with the retail segment mobilising the remaining RM4 billion in FY2022. Funds for the non-retail Business Banking segment were raised through loans and trade facilities. In contrast, sustainable finance across Group GB was achieved through various sustainable finance products like green bonds, sustainable bonds, sukuk, green loans, and sustainability-linked loans. The Sustainable Product Framework (SPF) was used to classify these products into dedicated financing, general-purpose financing, and transition financing, with specific parameters to ensure they meet sustainability criteria. The stringency of the classification criteria is complemented by the implementation of the Sustainability-linked Product (SLP) Guidelines, on top of the existing criteria for the suite of other products, to support Relationship Managers in the identification of relevant sustainable KPIs and Sustainability Performance Targets (SPTs) for SLPs. It's crucial to align KPIs with the issuer's sustainability strategy, focusing on environmental, social, and governance challenges. SLPs will adhere to guidelines, and the CSO will approve significant SPTs across Maybank Group, ensuring consistency in setting impactful performance targets for clients, communities, and the planet. For our retail segment, the introduction of the SPF has streamlined and enhanced the development of our successful sustainable solutions. We have recategorised our sustainable retail financing portfolio, establishing two new key criteria, i.e. Renewable energy and Sustainable investment, in addition to the existing Green building, Clean transportation and Affordable basic services/infrastructure criteria. Internally, Maybank’s Group Sustainability (“GS”) is responsible for developing and maintaining the overall Framework, including ensuring that the underlying themes and activities are aligned with market practices and expectations. The GS team seeks input and guidance from the Bank’s business teams and is responsible for ensuring that all transactions categorised as sustainable finance will adhere to the current version of the Framework. With the implementation of the SPF, annual updates on the Framework and sustainable finance, at the very minimum, proves Maybank is intent on ensuring our sustainability journey is transparent to public scrutiny, helping us abstain from unethical practices and the disclosure of misleading information. With the help of the SPF, the Bank is able to focus on truly sustainable solutions thus strengthening our ability to mobilise sustainable finance, and enabling us to better serve our customers as we strive towards fulfilling our mission of humanising financial services. This milestone supports our sustainability journey by focusing on unerringly sustainable products while reducing our carbon footprint as we work towards taking on a leading role in sustainability within Southeast Asia. For further information on Maybank’s Sustainable Product Framework, please refer to our Sustainability Report.