RAM Sustainability assigns Gold Sustainable Finance Rating to XSD’s Green Financing Framework

Published on 25 Jun 2025.

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RAM Sustainability has completed the second-party opinion assessment of XSD International Paper Sdn Bhd’s (XSD or the Borrower) Green Financing Framework (the Framework) and assigned it a Gold Sustainable Finance Rating (SFR).

XSD is a paper manufacturing company that makes recycled paper products for packaging. Its coated duplex board and grey board products are 98% to 100% made up of recycled materials. Reflecting its commitment to responsible and sustainable sourcing practices, XSD and its final products carry Forest Stewardship Council certification.

The Framework will be used to support XSD’s USD70 mil green senior loan from the International Finance Corporation (the Green Loan). The Green Loan proceeds will be utilised for (i) the development of a cogeneration plant using biomass waste as feedstock; and (ii) the construction of a second duplex board production line in Kulim, Malaysia, with a capacity of 300,000 tonnes per annum.

The Gold SFR is driven by the alignment of the Framework with the Green Loan Principles, XSD’s strong commitment to sustainability and the expected contribution of its eligible projects to a range of positive net environmental impacts.

XSD’s recycled paper production line expansion project has been accorded a Tier-1 EB ranking to reflect strong contributions to natural resource circularity and efficiency using waste paper as the primary input. The Borrower’s 35MWe cogeneration plant project, which supports the production line, has been accorded a Tier-2 EB ranking in view of its relatively high energy conversion efficiency of 71% (versus 30%-40% efficiency of conventional systems), coupled with the utilisation of biomass waste as fuel. The biomass fuel is comprised of palm empty fruit bunches (EFBs) and wood chip waste which are expected to remove methane emission from open decomposition and landfilling, support a circular economy and lower XSD’s dependence on fossil fuel. While EFBs are sourced from MSPO-certified mills, traceability documentation for the wood chip waste is limited.

In terms of sustainability governance and practices, XSD has demonstrated a strong commitment to sustainability. The Borrower plans to achieve net-zero carbon emissions for its Scope 1 and 2 emissions by 2050, underpinned by innovative energy efficiency measures. Another key focus area is the scaling up its community-focused corporate social responsibility initiatives, supporting national environmental, social and governance priorities, and fostering long-term social impact. 

We conclude that the Framework has an Aligned disclosure level when assessed against the Loan Syndications & Trading and Asia Pacific Loan Market Association’s Green Loan Principles. 

 

Analytical contacts
Cynthia Lim Sin Lu
(603) 2708 8293
cynthia@ram.com.my

Amirah Jamil
(603) 2708 8294
amirah@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my

 

This external review or second opinion is not a recommendation to purchase, sell or hold a security, in as much 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. It is also not a credit assessment on the proposed Green, Social or Sustainability Bonds/Sukuk.

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 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.

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