SMBC Malaysia extends ESG practices locally with the aim to provide long-term sustainable financing to corporations that will ultimately contribute to the economic prosperity of Malaysia.
Sumitomo Mitsui Banking Corporation Malaysia (SMBC Malaysia) marks its 10-year milestone by introducing environmental, social, and governance (ESG) products that further cements its commitment towards sustainability in Malaysia.
After SMBC Malaysia received its full banking license from Bank Negara Malaysia in 2010, it started operations in April 2011 – continuing the legacy that started back in 1975 as a small representative office established in Kuala Lumpur.
Currently, the bank aims to commit itself to playing a proactive role in the fight against climate change – an existential issue for all and a topic that financial institutions may be in a good place to help address.
“As SMBC Malaysia celebrates its 10th anniversary, the introduction of these ESG products is testament to SMBC Malaysia’s commitment in providing long-term sustainable financing to corporations that will ultimately contribute to the economic prosperity of Malaysia,” said SMBC Malaysia president and chief executive officer Hiroshi Okawa.
“We believe in the power of working together in the global fight against climate change. When such partnerships are forged between financial institutions and corporate customers, the results will be impactful and help us create a better tomorrow.”
Sustainable financing is not new to SMBC Malaysia’s parent organisation, SMBC Group, which is an early adopter of green bonds and holds a solid track record in raising ESG finance.
Besides that, as a member of SMBC Group, its local counterpart’s ESG efforts would align with the ‘SMBC Group x Globe 2030’ commitment.
This commitment is an ongoing and established 10-year plan with clear ESG targets to make sustainability a reality.
The bank notes an increase in the demand for ESG-linked financial instruments that support ESG initiatives and sustainability strategies of corporations is obvious.
Therefore, to support and satiate the market hunger for sustainable financing, SMBC Malaysia introduces three categories of ESG financial products to support its customers’ decarbonisation journey.
These loans are essentially corporate loans topped with environment-related features.
Two of the ESG loan categories introduced by SMBC Malaysia are the Green Loan and Social Loan.
These are loan instruments exclusively to finance or refinance new and existing loans used for green or social projects.
These projects would include but not limited to providing basic infrastructure – such as clean drinking water and energy.
In addition, sustainability-linked loans aim to promote and support environmentally and socially beneficial economic activities by linking corporate loan terms with a customer’s performance.
A customer’s performance would be measured against mutually agreed sustainability performance targets that are consistent with a customer’s sustainability strategy.
“SMBC Malaysia wants to be recognised as a leading provider of green and sustainable finance solutions. We aim to do this by developing sustainable and innovative ESG products and services that will help ‘green’ our customers as we embark on this ESG journey together.
“By successfully obtaining any of these ESG loans, a corporation is recognised as a sustainable organisation with strong ESG policies in place. This recognition contributes to the image of the corporation,” Okawa added.
Sustainability for the next generation has been and remains a priority for SMBC Malaysia as the bank looks forward to reaching new milestones locally.
