CIMB Group became the first bank globally to establish a net-zero decarbonisation target anchored on science-based pathways for palm oil in November 2023. This pioneering move addresses emissions from a productive and affordable crop that contributes significantly to Southeast Asian economies but, due to rapid growth in demand, has been linked to environmental and social issues, including deforestation, peatland clearance, and land conflicts.
CIMB’s target aims to reduce the emissions intensity of its palm oil portfolio by 16%, from 1.81 to 1.52 tCO2 e/tCPO by 2030. The palm oil target utilised the SBTi Forest, Land and Agriculture guidance to set Scope 1 and 2 emissions targets for plantations. Using scientific literature, CIMB then accounted for emissions intensity associated with palm oil mill effluent, as well as Scope 3 upstream emissions linked to CIMB’s clients’ sourcing of the raw material for palm oil mills from smallholders. By including smallholders in its target, CIMB aims to encourage its clients to involve their smallholder suppliers in their decarbonisation journeys.
To achieve this target, CIMB is engaging with clients to pursue Certified Sustainable Palm Oil (CSPO) accreditation, promote sustainable agricultural practices, and enhance emissions reporting. The bank also supports the installation of biogas plants at palm oil mills and strictly adheres to its No Deforestation, No Peat, and No Exploitation policy. CIMB has already provided financing to a client to purchase a palm oil mill where the feedstock is 100% sourced from estates and biogas plants certified by the Roundtable on Sustainable Palm Oil (RSPO). These initiatives align with CIMB’s broader sustainability efforts and commitment to achieving net zero emissions in its lending and investment portfolios by 2050.
Read more on CIMB’s net-zero targets here.
This case study was originally published in the Net-Zero Banking Alliance 2024 Progress Report (October 2024).
Disclaimer: NZBA shares case studies to promote member banks’ awareness of new approaches, tools, products, services, and transactions related to financing the transition to net zero. Featuring a case study naming a particular bank does not represent an endorsement of all actions from that bank.