RAM Sustainability delivers Second Opinion on SUNREIT Bond’s Sustainability-Linked Medium-Term Note Framework

Published on 17 May 2024.

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RAM Sustainability finds SUNREIT Bond Berhad’s (SUNREIT Bond or the Issuer, formerly SUNREIT Unrated Bond Berhad) Sustainability-Linked Medium-Term Note (SLMTN) Framework (the Framework) to be in line with the International Capital Market Association’s Sustainability-Linked Bond Principles and ASEAN Capital Market Forum’s ASEAN Sustainability-Linked Bond Standards (together, the Guidelines). The Framework is viewed to have an Aligned to Strong level of disclosure. 

The Issuer is a wholly owned non-operating vehicle of Sunway Real Estate Investment Trust (Sunway REIT or the REIT), set up as a funding conduit for Sunway REIT. In December 2021, SUNREIT Bond issued its first SLMTN under its Medium Term Note Programme of up to RM10 billion in nominal value.

Our opinion of the Framework concludes that the two key performance indicators (KPIs) selected – annual renewable energy (RE) generation (MWh) and building energy intensity (BEI) (kWh/m2/year) – are adequately relevant and material to the REIT’s business and sustainability strategy. Sunway REIT has identified the contribution of carbon emissions through building energy consumption within its portfolio as a material issue. Enhancing energy efficiency and RE use are priority solutions to address this matter.

The Sustainability Performance Targets (SPTs) in the Framework extend to 2030, compared to the previous three-year timeframe, outlining the Issuer’s commitment to achieving them over a medium term. Sunway REIT’s SPTs are to increase RE generation by 2% and lower BEI by 0.5% annually. By 2030, the Issuer targets to achieve 3,524 MWh annual RE generation and BEI of 284 kWh/m2/year. In our view, the committed SPTs remain sufficiently ambitious in the context of a local REIT player. 

The financial characteristics of the Framework are seen to provide an adequate incentive for the Issuer to achieve its targets. Achievement of a SPT is linked to step-down adjustments in coupon rate and/or a waiver of purchase of Renewable Energy Certificates and/or other arrangements agreed with the respective SLMTN subscriber. Conversely, the Issuer will be penalised accordingly if a SPT is not met. The Issuer commits to reporting the selected KPIs’ performance in Sunway REIT’s annual sustainability report which is publicly available on its corporate website. Sunway REIT's annual sustainability report, including achievement of the KPIs, will be externally verified on an annual basis by an independent third-party reviewer.

As of 30 April 2024, Sunway REIT manages a diverse portfolio with assets strategically located across key areas including the states of Selangor, Kuala Lumpur, Penang, Perak and Johor, solidifying its position as one of Malaysia’s largest diversified REITs. Its property portfolio comprises 25 assets in the retail, hotel, office, services, industrial and others segments.

RAM Sustainability classifies sustainability-linked bond frameworks as Weak, Aligned, Strong or Advanced in comparison to applicable regulations and guidelines or best practices.


Analytical contacts
Joel Thum
(603) 3385 2517

Amirah Jamil
(603) 3385 2551

Media contact
Sakinah Arifin
(603) 3385 2500


This external review or second opinion is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for an investor, nor does it involve any audit by RAM Sustainability.

About RAM Sustainability

RAM Sustainability Sdn Bhd (RAM Sustainability) is a provider of sustainability services and ESG analytics. Incorporated on 31 May 2000, RAM Sustainability is a wholly owned subsidiary of RAM Holdings Berhad (RAM Group). RAM Sustainability is the first ASEAN-based provider of ESG ratings and second opinions and has the distinction of being the first Registered Observer of ICMA’s Green Bond Principles, Social Bond Principles, Sustainability Bond Guidelines and Sustainability-Linked Bond Principles in ASEAN. It was a member of ICMA’s Advisory Council to the GBP and SBP Executive Committee for three consecutive terms. On 12 August 2020, RAM Sustainability became an Approved Verifier for the certification of climate bonds under the Climate Bonds Standard & Certification Scheme after having been awarded the status by the Climate Bonds Standards Board. For further details, please refer to https://www.ram.com.my/sustainability.

Published by RAM Sustainability Sdn Bhd 

© Copyright 2024 by RAM Sustainability Sdn Bhd

Publication Date Published Category
SUNREIT Bond Berhad Sustainability-Linked Medium Term Note Framework 17-May-2024 Green Bond/Second Opinion Report View PDF