Page 114 - Bank-Muamalat_Annual-Report-2023

BANK MUAMALAT MALAYSIA BERHAD

OUR PROGRESS AND
OUTPUT IN SUSTAINABILITY

1. ENERGY AND RESOURCE MANAGEMENT M6 Energy Consumption and Environmental Impact

Why is this Important? Commitment to ESG and Climate Change at Bank
Muamalat
At Bank Muamalat, we continue to prioritise resource
and energy efficiency as well as sustainable infrastructure, On 30 April 2021, Bank Negara Malaysia issued the
processes, and systems to achieve our business goals. Climate Change and Principle-Based Taxonomy (CCPT),
The formation of the Cost Saving Initiative (CSI) Taskforce in urging financial institutions to enhance their role in
late 2019 has heightened our focus on energy and resource supporting climate and environmental objectives through
management. The CSI programme has successfully generated green financing, investment, and advisory activities.
significant cost savings and established more efficient Embracing this initiative, Bank Muamalat has initiated
processes without compromising regulatory requirements. ESG Scorecard Assessment for customer assessments to
gauge their exposure to climate change, aiming to
Sustainability and environmental stewardship have become monitor their progress toward adopting climate-related
imperative in today’s business landscape. We recognise objectives.
the critical importance of reducing our environmental
footprint and contributing to a greener future. The initiatives Additionally, Bank Muamalat plans to integrate climate-
we have undertaken underscore our commitment to related objectives into its risk management framework
environmental responsibility, resource efficiency, and cost to fully embed sustainable practices across banking
savings. By transitioning to more sustainable practices, operations. We have conducted comprehensive ESG risk
we are not only safeguarding the environment but also assessments for selected non-individual customers
enhancing our operational efficiency and long-term viability. based on our ESG Scorecard Guideline. High-risk
customers are required to develop mitigation plans
Supporting Climate and Environmental Objectives with specific time-bound monitoring triggers, in
alignment with the Climate Change Classification
In recent years, ESG factors have gained significant
under the Bank Negara Malaysia’s CCPT.
attention from stakeholders, including customers,
investors, policymakers, and society as a whole. Effective Our enhanced annual review process involves reassessing
ESG risk management has become increasingly crucial, customers, tracking mitigation plans, and scrutinising
with businesses expected to make decisions that them as needed. This ongoing refinement supports the
contribute to the broader society and combat climate transition to better practices for managing ESG risks and
change. As a financial institution, Bank Muamalat mitigating our impact on climate change. Through these
faces particular scrutiny due to our ability and influence measures, Bank Muamalat strengthens its commitment
in mobilising capital. We are in a unique position to to responsible banking and contributes proactively to
steer investments away from short-term, potentially global sustainability efforts.
harmful ventures toward long-term projects that
address sustainability issues, with a strong emphasis
on climate action. The growing demand for sustainable
financing has led to a surge in interest among investors
for sustainability-linked funding. By integrating
ESG considerations into our financing, investment,
and advisory practices, Bank Muamalat strengthens
its position as a responsible financial institution and
contributes to the global effort in combating climate
change.

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