RAM Sustainability upgrades MIDF’s Sustainability Rating to Silver1 from Silver2

Published on 06 Aug 2024.

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RAM Sustainability has upgraded Malaysian Industrial Development Finance Berhad’s (MIDF) overall Sustainability Rating to Silver₁ (S₁) from Silver₂ (S₂). Our current year rating review focuses exclusively on assessing MIDF’s standalone sustainability performance given that integration with its new parent, MBSB Berhad (MBSB), is still underway.

The upgrade is supported by continuous improvement in MIDF’s environmental and social practices during the review period. The Group’s Environment Rating has been upgraded to Bronze₁ (B₁) from Bronze₂ (B₂) while its Social Rating has been raised to Gold₃ (G₃) from S₁.

Encik Azizi Hj Mustafa, MIDF Chief Executive Officer, stated, “This upgraded sustainability rating is a testament to our unwavering commitment to sustainability. Our commitment in Sustainability is a cornerstone to our long-term success and to create positive impacts for the communities we serve.” 

The Environment Rating upgrade is driven by MIDF’s robust commitment to environmental management, underscored by its Environment, Social and Governance (ESG) policy, materiality assessment, measures to reduce carbon emissions and initiatives to offset carbon emissions through carbon credits. The Social Rating upgrade primarily highlights MIDF’s positive workplace initiatives such as the implementation of various e-learning and AI-powered employee engagement platforms and the incorporation of social factors in supplier declarations. RAM Sustainability sees opportunities for growth, particularly in enhancing target setting, such as establishing a net zero target, tracking scope 3 carbon emissions, and developing environmental and social performance indicators for supply chain and vendor capacity-building programs.

Meanwhile, we have affirmed MIDF’s governance and positive impact rating. As a regulated financial services group, MIDF adheres to Bank Negara Malaysia (BNM)’s Corporate Governance Policy and guidelines, which drive its sound practices, including board effectiveness and independence. MIDF has enhanced the role of its Board in the Board Charter to oversee all ESG-related decisions, actions and considerations as well as sustainability-related risks to safeguard MIDF’s Group resilience and growth. As a developmental finance institution, MIDF continues to demonstrate a strong commitment to small and medium enterprise (SME) and sustainable financing. 

In March 2024, MIDF, together with MBSB Bank, launched the Women Independent SME Entrepreneurs programme. This initiative tackles the gender gap in business ownership by providing dedicated financing solutions for women entrepreneurs. As part of the enlarged MBSB group, MIDF is leveraging its combined resources to help customers in their transition journey towards a socially responsible and low-carbon economy. We expect MIDF to continue to offer sustainable and financially inclusive products and services in the future.

Going forward, we also foresee opportunities for MIDF to capitalize on MBSB’s strengths, particularly in areas in which it currently falls short, like environmental and supply chain management. The integration holds potential benefits, especially through (i) the adoption of MBSB’s robust target for environmental stewardship such as Net Zero by 2050; (ii) the opportunity to enhance financial inclusion by leveraging each group’s individual or SME network; and (iii) the adoption of MBSB’s structured supply chain management plan and target. 

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 Green Bond Principle and Social Bond Principle 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.

 

Analytical contact
Cynthia Lim Sin Lu
cynthia@ram.com.my

Media contact
Sakinah Arifin
sakinah@ram.com.my

 

Published by RAM Sustainability Sdn Bhd 
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