Climate Risk & Strategy

Roadmap to 2030​

We have a robust roadmap to reduce our Scope 1 and 2 emissions to net zero by 2030. Our all-encompassing approach has resulted in a four-pronged strategy designed to address current and long-term operational GHG emissions in an effective, responsible, and resilient manner. Our future capex will align with the following levers

Lever 1: Business Premises Optimisation

With the advancement of our digital banking services and technology, we have optimised and consolidated our premises, leading to a reduction in overall floor space. As we transition to a hybrid working model, we expect further decreases in physical office space. To enhance efficiency, we are conducting a strategic review to eliminate service duplication across multiple locations in the same vicinity. Leveraging digital analytics, we aim to optimise branch resources, reducing our carbon footprint while redirecting resources to more strategic and high-traffic locations.

Lever 2: Avoiding and Reducing Energy Consumption

To enhance energy efficiency, we conducted a pilot project across several branches and at CIMB headquarters in Malaysia to better understand energy consumption patterns. Energy Champions were appointed at each location to identify and implement energy-saving initiatives, with energy usage monitored over several weeks.

We remain committed to optimising energy use through ongoing upgrades to mechanical and electrical systems and the adoption of best practices in energy efficiency.

Lever 3: Green Electricity

The Malaysian Ministry of Energy and Natural Resources introduced the Green Electricity Tariff (GET) Programme in 2022, enabling customers to purchase low-carbon electricity from Tenaga Nasional Berhad. As part of our commitment to sustainability, we have pledged to procure a portion of our electricity through this program.

Additionally, we actively source renewable energy through the open Renewable Energy Certificates (REC) market and continue to explore long-term renewable energy procurement via virtual Power Purchase Agreements (PPAs) in relevant countries.

Lever 4: Carbon Offsets

Our priority is to maximise GHG reductions through Levers 1 to 3. However, some emissions remain unavoidable. To address this, we are closely monitoring developments in voluntary carbon markets and will consider purchasing carbon offsets to achieve net zero Scope 1 and 2 emissions in our operations by 2030.

We aim to prioritise verified carbon offsets from local projects in the countries where we operate, ensuring alignment with our sustainability commitments and positive regional impact.

Our high-level pathway to net zero 2030 is shown in the diagram below. However, this is a forward-looking projection and we anticipate changes in the future based on advancements in technology, policy changes by the government, or new energy schemes in the market.

Short-Term Initiatives (2022 - 2025)

In the near term, our focus is on implementing energy-saving initiatives that deliver quick and tangible results. These include transitioning to energy-efficient LED lighting, integrating motion sensors, and phasing out outdated single split-unit cooling systems. Additionally, a combination of lighting and cooling system upgrades, along with the installation of electric vehicle (EV) charging stations, is planned for select branches leading CIMB’s sustainability efforts.

Medium-Term Initiatives (2025 - 2027)

Medium-term initiatives involve higher capital investments but offer significant long-term energy savings. Key projects include deploying automated central monitoring systems, replacing chillers, and expanding renewable energy adoption. While we prioritise on-site renewable energy solutions, space constraints at our premises limit these opportunities. However, we have already begun installing solar systems at select headquarters and plan to roll out solar photovoltaic (PV) systems across key offices and branches in the region.

Additionally, we will progressively procure Renewable Energy Certificates (RECs) in each country where we operate. RECs are market-based instruments that certify the environmental benefits of renewable electricity generation. Each REC represents one megawatt-hour (MWh) of electricity generated and delivered to the grid from a renewable source. 

Long-Term Initiatives (Beyond 2028)

Looking ahead, CIMB is exploring the procurement of green electricity through market mechanisms such as Virtual Power Purchase Agreements (VPPAs). This approach enables us to indirectly source renewable energy from solar and other renewable providers via the national energy grid on a long-term basis.

To address residual Scope 1 GHG emissions, we anticipate purchasing high-quality carbon credits—tradable instruments that represent the right to offset a specified amount of carbon dioxide emissions. However, given the projected rise in carbon offset costs, we will prioritise all feasible emissions reduction measures before considering offsets as a last resort.

Our GHG Accounting Approach

CIMB is committed to transparently calculating and reporting our greenhouse gas (GHG) emissions, adhering to internationally recognised standards and progressively aligning with IFRS S2 Climate-related Disclosures. Our approach ensures accuracy, completeness, and consistency in reporting as we work towards a low-carbon future.

GHG Accounting Standards and Methodologies

We calculate and report our GHG emissions in accordance with the Greenhouse Gas Protocol, a widely recognised international standard. Our approach follows the operational control method, meaning we account for 100% of emissions from operations over which we have control.

Our GHG emissions are categorised into three scopes as defined by the Greenhouse Gas Protocol and progressively aligned with IFRS S2 requirements:

• Scope 1: Direct emissions from sources that we control, including on-site fuel combustion for electricity generation, fuel use in company vehicles and mobile generators, and fugitive emissions from refrigerants used in air-conditioning systems.
• Scope 2: Indirect emissions from purchased electricity, heat, or steam. We report both location-based and market-based emissions:
  • The location-based method reflects the average emissions intensity of the power grid supplying our electricity.
  • The market-based method accounts for the specific energy sources we purchase, such as renewable electricity through green energy programs.
     

• Scope 3: Other indirect emissions from our value chain. Our operational Scope 3 reporting includes the following seven categories:
   

1. Category 1 – Purchased Goods and Services: Emissions associated with goods and services procured by CIMB to support our business operations, including office supplies, IT equipment, and professional services.
2. Category 5 – Waste Generated in Operations: Emissions from waste disposal and treatment, including paper waste, electronic waste, and other operational waste streams.
3. Category 6 – Business Travel: Emissions from business travel, including flights, accommodation, and other transport-related activities.
4. Category 7 – Employee Commuting: Emissions from employees travelling to and from work, including personal vehicles and public transportation.
5. Category 8 – Upstream Leased Assets: Emissions from leased office spaces and buildings where CIMB operates but does not own the assets.
6. Category 9 – Downstream Transportation and Distribution: Emissions related to the transportation and distribution of products and services downstream in our value chain.
7. Category 13 – Downstream Leased Assets: Emissions from properties and other assets leased out to tenants or customers.
   
   
8. For Category 15 – Investments (Financed Emissions), which covers emissions from CIMB’s financing activities, please refer to the Financed Emissions section on our website.

Data Collection, Emission Factors, and IFRS S2 Alignment

We collect energy, fuel, and refrigerant consumption data from electricity bills, fuel invoices, and facility management records. Recognised standard emission factors are used to convert energy consumption into CO₂ equivalent emissions, sourced from reputable organisations such as the Intergovernmental Panel on Climate Change (IPCC) or relevant national authorities.

To enhance data accuracy, we employ a combination of top-down and bottom-up approaches based on data availability and reliability. As part of our alignment with IFRS S2, we are improving our climate-related disclosures by:

• Enhancing granularity and transparency in emissions data reporting.
• Disclosing climate-related financial risks and opportunities.
• Strengthening governance and internal controls over GHG accounting and reporting.

Transparency, Continuous Improvement, and Restatement Policy

CIMB is committed to transparency in our GHG emissions reporting and continuously enhances our methodology to align with best practices and evolving industry standards.

• We periodically review and update our approach to improve data accuracy and completeness.
• Given inherent limitations in data collection, our GHG emissions calculations may include some level of uncertainty.
• We have established a materiality threshold of 5% for our GHG emissions inventory. If any emission source exceeding this threshold is identified but was not previously accounted for, we will restate our GHG emissions for the affected period.

For more information on our GHG accounting approach, please refer to our GHG Calculation Methodology - Public Methodology Document. 

Current and Anticipated Effects of Climate-Related Risks and Opportunities

In line with IFRS S2, CIMB is assessing the current and future impacts of climate-related risks and opportunities across all three GHG scopes:

Scope 1 & 2 – Direct & Indirect Emissions from Operations

Risks

• Carbon Pricing & Regulatory Costs: Rising carbon taxes and regulatory policies may increase operational costs for on-site fuel use and electricity consumption.
• Energy Supply & Reliability Risks: Grid reliability issues due to extreme weather events could disrupt operations, leading to higher energy costs or outages.
• Technology Transition Risks: The shift to low-carbon technologies may require capital investments in energy efficiency upgrades and renewable energy procurement.

Opportunities

• Operational Efficiency Gains: Investment in energy-efficient systems and low-GWP refrigerants can reduce emissions and long-term costs.
• Renewable Energy Procurement: The expansion of green energy sourcing, including Power Purchase Agreements (PPAs) and Renewable Energy Certificates (RECs), will help lower our carbon footprint.

Scope 3 Indirect Emissions from Supply Chain and Business Activities

Risks

• Supply Chain Disruptions: Climate change-related disruptions (e.g., floods, extreme weather) can impact suppliers, affecting operational continuity and procurement costs.
• Increased Stakeholder Expectations: Investors, regulators, and customers are demanding greater transparency and accountability for value chain emissions.
• Higher Business Travel & Commuting Emissions Costs: Potential carbon taxes on air travel and corporate fleet emissions could impact business travel policies and mobility strategies.

Opportunities

• Sustainable Procurement & Supplier Engagement: Collaborating with suppliers to reduce emissions from purchased goods and services can drive circular economy initiatives and improve resilience.
• Digitalisation: The expansion of virtual collaboration tools can reduce employee commuting and business travel emissions, contributing to increased efficiency at work.
• Sustainable Transportation Solutions: Investment in electric vehicle (EV) adoption, green mobility programs, and low-carbon logistics partnerships can mitigate Scope 3 transport-related emissions.

Internal Carbon Price

To encourage our countries and divisions to reduce emissions and integrate the cost of carbon into decision-making, CIMB introduced an Internal Carbon Pricing (ICP) framework in 2021.

This economic incentive charges a penalty for Scope 1 and 2 emissions exceeding divisional caps, fostering accountability across CIMB.

The ICP framework is designed to:

• Help CIMB prepare for GHG regulations, including carbon taxes.
• Embed carbon costs into investment decisions to encourage low-carbon alternatives.
• Improve energy efficiency and reduce reliance on carbon-intensive processes and equipment.
• Fund low-carbon investments and sustainable solutions.
• Assess projects for carbon risks and future regulatory changes.
• Drive internal change by pricing excess emissions to incentivise reductions.

In 2024, CIMB set the ICP at a minimum of RM70 per tonne of CO₂e, benchmarked against our Marginal Abatement Cost (MAC) Curve, as well as regional prices for Renewable Energy Certificates (RECs), carbon credits, and carbon taxes. By 2030, the ICP is expected to rise to RM275–RM355 per tonne, reflecting the anticipated tightening of climate policies and the increasing cost of carbon in global markets.

Funds collected through the ICP are reinvested into decarbonisation initiatives, including:

• Energy-efficient infrastructure and upgrades to reduce electricity and fuel consumption.
• Renewable energy adoption, including the purchase of RECs to support clean energy procurement.
• High-quality carbon offsets to compensate for unavoidable emissions.

Our Approach to Waste Management

Beyond managing our carbon footprint, CIMB is committed to minimising environmental impacts through responsible waste management. Effective waste reduction, segregation, and responsible disposal are key components of our broader sustainability strategy, aligning with our commitments to resource efficiency and circular economy principles.

While the nature of our operations as a financial institution generates relatively low levels of physical waste, we acknowledge the need to minimise waste generation and mitigate any potential negative impacts on the environment.

Our significant waste-related impacts include:

• Office Waste Generation: Paper consumption, electronic waste, and general office waste.
• E-Waste Management: Proper disposal and recycling of outdated electronic equipment.
• Vendor and Supplier Collaboration: Working with partners who adhere to sustainable waste management practices.
• Recycling and Reuse Initiatives: Implementation of recycling programs and reduction of single-use materials.
   

We actively consider waste management strategy that aligns with the principles of circular economy and resource efficiency. Our approach is designed to prevent waste generation, enhance recycling efforts, and responsibly manage disposal processes.

Our waste management approach covers:

• Waste Prevention and Reduction
  • Transition to digital documentation to minimise paper use.
  • Implement energy-efficient systems to reduce electronic waste.
     
• Recycling and Reuse
  • Establish recycling bins in high-traffic office premises.
  • Partner with certified e-waste recyclers for safe disposal of electronic devices.
     
• Responsible Disposal and Compliance
  • Ensure compliance with local regulations and international standards for hazardous and non-hazardous waste.
  • Track and report waste generation data for continuous improvement.
     
• Employee Engagement and Awareness
  • Conduct regular training sessions on waste reduction practices.
  • Encourage sustainable habits among staff through green initiatives and incentives.
     
• Collaboration with Stakeholders
  • Engage with suppliers and service providers to promote responsible waste management practices.
  • Support recycling and waste reduction programs.

Scope 1 and 2 Operational Emissions

At CIMB, we are committed to reducing our Scope 1 and 2 emissions as part of our broader climate strategy. Our approach is guided by internationally recognised standards, including the Greenhouse Gas Protocol, and is progressively aligned with IFRS S2 Climate-related Disclosures.

Scope 1 and 2 Metrics

Our Scope 1 and 2 emissions inventory covers:

• Scope 1: Direct emissions from on-site fuel combustion, company-owned vehicles, and refrigerant leaks.
• Scope 2: Indirect emissions from purchased electricity used in our buildings and operations.

To ensure transparency and consistency, we measure and report:

• Total Scope 1 and 2 emissions (tCO₂e) on an annual basis.
• Energy consumption (MWh) across our facilities.
• Renewable energy consumption (MWh) to track our transition to clean energy.

Our Scope 1 and 2 Target

CIMB has set an ambitious target to achieve net zero Scope 1 and 2 emissions by 2030.

Refer to the Strategy – Operational Emissions tab and our Sustainability Report for more information.

Scope 3 Financed Emissions

As a financial institution, our largest emission type is our Scope 3 Category 15 (Investment) emissions, contributing more than 99% of our overall emissions. This category of emissions are attributed to the business activities of our clients that we finance and invest in, and their respective value chains.

In 2022, we disclosed our first portfolio financed emissions inventory covering our FY2021 on-balance sheet financing for clients across four key operational markets: Malaysia, Indonesia, Singapore and Thailand. The scope of our FY2021 financed emissions included nine carbon-intensive sectors (Agriculture, Aluminium, Cement, Coal, Iron & Steel, Oil & Gas, Real Estate, Transport, and Power) and four asset classes (Business Loans and Unlisted Equity, Commercial Real Estate, Mortgages, and Motor Vehicle Loans).

In 2023, we established our first baseline as of 31 December 2022 which included an updated calculation methodology and expanded our coverage to include an additional asset class, Listed Equities and Corporate Bonds and expansion of the Utilities Sector to include non-power generation segments. In estimating our financed emissions, we reference the Global GHG Accounting and Reporting Standard developed by the Partnership for Carbon Accounting Financials (PCAF Standard) and the UN Environment Programme Finance Initiative (UNEP FI) Guidelines for Climate Target Setting for Banks.

In November 2023, we published Version 1.0 of Our Path to Net Zero: Charting a Course to Decarbonisation whitepaper, outlining our approach and methodologies for setting 2030 Net Zero sector-specific targets and high-level transition strategies. This version focused on targets for four sectors: Thermal Coal Mining, Cement, Palm Oil, and Power. In July 2024, we released Version 2.0, which added targets for Oil and Gas and Real Estate, superseding Version 1.0. While our portfolio financed emissions provide an overview of emissions attributed to assets within our financing and investment portfolio, our sector-specific targets provide the reduction goals and 1.5°C aligned pathways for carbon-intensive segments based on historical emissions and future reduction potential.

CIMB's 2023 Financed Emissions

In 2023, our total attributed financed emissions (Scope 1 and 2) associated with our nine most carbon-intensive sectors amounted to 18,816,782 tCO₂e, a 2.6% increase from our 2022 emissions. 

Notes:

1. Our 2022 baseline was established based on the Group’s Financed Emissions Calculation Methodology. This was enhanced in 2023 to cover, among others, the following:

• Calculation and estimation approach for the newly added Listed Equity and Corporate Bonds asset class; 
• Inclusion/exclusion of selected sub-sectors and/or clients to be subjected to financed emissions assessment (i.e., in-scope exposures assessed for financed emissions);
• An updated list of PCAF emission factors as of March 2023;
• Revised assumptions including estimated local/regional statistical data on distance travelled for motor vehicle loans asset class and average floor area per building type for mortgage asset class, as well as the baseline recalculation criteria.

2. Financed emissions for FY2021 were not restated or recalculated per the enhanced Financed Emissions Calculation Methodology on the grounds that FY2022 serves as the base year for the Group’s financed emissions inventory, in line with the base year used in selected sector-specific climate targets of the Group, and that the recalculation of previous years’ performance requires a significant level of effort to complete. Any variations in terms of absolute emissions between FY2021-2022 are not solely an indication of the Group’s decarbonisation outcomes but rather attributable to methodological differences.

• The Agriculture sector emission intensity increased by 9.8% compared to 2022, due to the higher emissions from the growth of the upstream Palm and Poultry portfolio in Indonesia.
• The Cement sector emission intensity declined by 36.4% compared to 2022, mainly attributed to financing maturity of several high emission intensity clients.
• Though our Coal sector emission intensity increased by 6.2% compared to 2022, our overall exposure for the sector declined by 10%, in line with our target to exit Thermal Coal Mining by 2040.
• The Iron, Steel & Aluminium sector’s emission intensity decreased by 12.6%, which can be attributed to the shift of financing composition from upstream segments i.e., mining and extraction, towards the manufacturing and production activities.
• The Real Estate portfolio intensity increased by 14.5%, driven by a 35% increase in exposure to the Commercial Real Estate asset class, and the doubling of gross floor area.
   

For more detailed information, please refer to the following:

2023 Financed Emissions Supplementary Report for our financed emissions, scope, methodology and limitations.

Our Path to Net Zero: Charting a Course to Decarbonisation Whitepaper Version 2.0 for our sector-specific Net Zero targets.

Sustainability Report 2023 (Pg. 60-63) for our latest progress against sector targets.