Malaysian banks are stepping up their environmental, social and corporate governance (ESG) efforts due to rising awareness on the importance of establishing good governance and oversight on ESG and its risks.
The Asian Institute of Chartered Bankers (AICB) chief executive Edward Ling said the banks are making considerable progress in their ESG journey.
Quoting Malaysia Joint Committee on Climate Change report published in April 2022, he said 92 per cent of the respondents — comprising banks, assets managers and insurers — have a sustainability strategy in place.
Meanwhile, 73 per cent of banking respondents have made some commitment to phase out financing coal-related activities.
When the banks become more aware of the needs and benefits of ESG, then they need to think about practical ways to implement the initiatives and strategies.
However, banks are not without their challenges when it comes to implementation, he said during the media roundtable session in conjunction with the Malaysian Banking ESG Conference 2022.
Ling said common challenges encountered by banks when adopting the ESG agenda include the absence of client data/information, lack of ESG expertise and awareness among stakeholders, as well as no standardised disclosure requirements.
Continuous efforts to raise awareness is important, but what is more important is education in terms of setting up good fundamentals for the people so that everyone would have the right knowledge and good attitude towards ESG, Bernama cited Lim sayig.
If you look at how the world is progressing in this space, you can see that some countries are faster and some are slower, however, this is a long-term target that we are talking about.
Transitioning is a process. So, if you look at, for example, the United Kingdom, we perceive them as a country that is more advanced than us, however, they are still facing a lot of issues as well in terms of ESG, he said.
Themed Banking on Change: Turning the ESG Momentum into Action, the Malaysian Banking Conference 2022 which started on Sept 12, 2022, was jointly organised by AICB and the Association of Banks in Malaysia.
The two-day conference featured insightful discussions on ESG-related topics, focusing on climate change and risks in Malaysia.
