The bank became the first financial institution in Malaysia to establish a Scope 3 financial emissions baseline as it began to chart its financed emissions reduction targets against timelines, it said in a statement today.

“For banks, financed emissions are indirect emissions related to loans, underwriting, investments and any other financial services. Financed emissions are a necessary input for climate scenario analysis, which is crucial in managing climate-related transition risks and opportunities,” it said.

“In undertaking this exercise to establish its financed emissions baseline, Maybank adopted the Global Greenhouse Gas (GHG) Accounting and Reporting Standard for the Financial Industry by Partnership for Carbon Accounting Financials,” it said.

The bank said this methodology focuses on calculating the emissions for six asset classes — listed equities and corporate bonds; business loans and unlisted equities; project finance; commercial real estate; mortgages and motor vehicle loans.

According to Maybank, listed equities and corporate bonds, business loans, as well as unlisted equities and project finance make up close to 80% of the group’s financed emissions.

It said the top five sectors contributing to most of Maybank’s financed emissions are power, oil and gas, agriculture, utilities and construction, while 97% of Maybank’s financed emissions come from its home markets in Malaysia, Singapore and Indonesia.

“By calculating and analysing the financed emissions data, Maybank can now progress towards performing quantitative scenario analysis to design pathways in reducing its financed emissions in line with its risk appetite and targets while engaging customers to support them to achieve their desired outcomes and commitments,” it said.

Maybank group president and CEO Khairussaleh Ramli said the key to achieving a net zero carbon position includes establishing the bank’s Scope 3 baseline financed emissions, analysing the main drivers of the emissions, designing a plan to reduce these emissions against a timeline and finally, implementing the plan.

“This exercise has enabled us to split our emissions by geographies, asset classes and sectors, which then allows us to focus on engaging with the customers that can have the greatest impact on reducing our financed emissions over the long-term.

“Our next step is to engage and collaborate with our customers and key stakeholders including regulators and ministries to implement our transition strategy,” he said.