Cimb Islamic Onboards First Shariah-compliant Sustainability-linked Treasury Client

KUALA LUMPUR, June 27 (Bernama) -- CIMB Islamic Bank Bhd has onboarded MTT Shipping Sdn Bhd  to its Sustainability-Linked Treasury Programme, with the latter setting a new milestone as the first client to utilise the bank’s programme with Shariah-compliant hedging instruments.

MTT Shipping is one of the leading local carriers in Malaysia, providing container shipping services which cover routes from Peninsular Malaysia to Sabah and Sarawak, as well as regional ports in Singapore, Thailand, Brunei, Indonesia, and India.

Launched in December 2022, the programme continues to attract clients who are looking to embed their environmental, social and governance (ESG) aspirations into longer-term treasury solutions offered by the bank.

The programme encompasses recurring flow transactions for clients’ business activity conversion cycles, for example imports/exports, as well as more episodic balance sheet hedging and risk management solutions.

Under the programme, MTT Shipping is entitled to receive a sustainability-linked reward based on the achievement of ambitious Sustainability Performance Targets which are subjected to stringent independent third-party verification.

“We are proud to embark on this journey with MTT Shipping to advance their sustainability goals through offering the first Shariah-compliant hedging solution in CIMB’s Sustainability-Linked Treasury Programme in meeting their ongoing business requirements.

“As a purpose-driven organisation, this exemplifies our commitment to not only prioritise product innovation, but also to generate long-term positive impacts on the economy, community and environment in line with the principles of Value-Based Intermediation,” CIMB Islamic chief executive officer Ahmad Shahriman Mohd Shariff said in a statement.

Meanwhile, MTT Shipping group executive chairman Datuk Seri Kenny Ong said this transaction emphasised the company’s commitment to integrating ESG considerations into its corporate roadmap and generating sustainable long-term value for its stakeholders.

“In recent years, we have seen an increasing number of ESG regulations in the maritime transport industry and we strive to ensure both our operations and decision-making processes are aligned to the policy recommendations and requirements set forth by the relevant regulatory bodies such as the International Maritime Organisation (IMO).

“This includes managing the carbon intensity indicator ratings of our vessels while aligning our overall emissions reduction trajectory to be in line with the IMO,” he said.

Over the past two years, CIMB has executed several significant sustainable financing transactions, including its landmark sustainability-linked derivative (SLD) in October 2021, the world’s first ringgit-denominated SLD transaction.

In 2022, the group doubled its sustainable finance target to RM60 billion by 2024 after having met its original target of RM30 billion two years ahead of schedule.

-- BERNAMA