International banks have been exiting coal financing at an accelerated rate this year amid pressure from non-governmental organizations (NGOs) and a global energy transition. CIMB Group Holdings Bhd has committed to phase out coal from its portfolio by 2040, saying it was the first banking group in Malaysia and Southeast Asia to do so. Malaysia’s second largest by assets, said its new ‘Coal Sector Guide’ will prohibit asset-level or general corporate financing for new thermal coal mines and coal-fired power plants, as well as expansions, except when there are existing commitments.
Guide will come into effect next year across all CIMB’s operating market. The group is working towards announcing more sustainability-related measures, in particular with respect to its positive impact financing target. It has also strengthened its sustainable financing policy requiring clients in the “High Sustainability Risk Sector”, such as palm oil, forestry, and oil and gas, to meet its environmental and social standards at the point of acquiring financing. The firm represents the first globally significant financial institution in the developing world to commit to a coal exit strategy.