CEO/Executive Director, CIMB Islamic Bank Berhad, and CEO, Group Islamic Banking, CIMB Group
Representing UNEP FI member: CIMB Group (Malaysia)
Connect with Rafe Haneef on LinkedIn
Mr. Haneef desires to share with fellow members the social impact journey of Islamic finance and help to converge the Islamic finance objectives with SDGs.
Though CIMB Group began embracing sustainable finance practices in 2017, we have through our Islamic finance space been a leader in responsible banking and finance since 2003. Sustainble finance shares many common values and practices with Islamic finance. Islamic banks, from their inception, have devised various social and financial impact screening tools to exclude businesses that create negative impact to society and channeled financing towards activities that maximize benefits to individuales and society.
Most of the SDGs also shares the same objectives of Islamic finance and the SDGs could augment existing screens and form a useful yardstick for Islamic banks for managing both the positive and negative impacts of their activities.
Responsible banks can learn from Islamic banks about the various tolerance levels for engaging with companies that are involved in activities which can cause negative impacts. As an example, a food manufacturing company which also manufactures cigarettes can be financed by an Islamic bank if the revenue from cigarettes is below a certain threshold. Islamic finance also advocates the use of financial ratios for cash, debt, and receivables. These screens on the financial health of the companies limit the excessive use of leverage, which is often the root cause of most financial crises. Islamic finance also sreens out socially destrutive or useless financial instruments like certain derivatives and speculative finance products.
Through our Islamic finance franchise, we have also been leading the Socially Responsible Investing (SRI) and Green Islamic fixed income instruments (sukuk). To date, CIMB Islamic has had a key role in the issuance of two SRI sukuks in the education space and two green financing sukuk, including the first sovereign green USD sukuk. In the consumer banking space, some of our offering include paperless Ecosave savings account, as well as hybrid and green building mortgage financing products with preferential rates.
CIMB Group also desires to access resources and influencers to help it create an enabling environment to drive sustainability in ASEAN, a developing economic region rich in primary resources, as well as in the Islamic finance industry, primarily located in ASEAN, the Middle East, and Africa with strategic links to Europe. There is currently a low level of awareness and engagement with these two financial communities with the wider global sustainable banking and finance development.
CIMB has been on the sustainability journey since 2017. During this period, Mr. Haneef advocated for the organization to embrace sustainability holistically, and in particular, its role in sustainable finance. Engagement sessions were held with the Board of Directors for the various group companies, the group management committee, and the central bank.
To raise awareness and educate key internal stakeholders and employees, we engaged with the World Wildlife Fund, sustainable banking industry leaders in Australia, Asia, and Europe. Over the course of a year and a half, sustainability efforts escalated in prominence internally, and is now a key pillar of CIMB’s core strategy for the next 5 years in the Southeast Asia (ASEAN) region. As a result of this, CIMB Group is the first bank in the ASEAN region to become member of the core group of UNEP-FI members helping to develop the draft Principles of Responsible Banking. It has contributed to the implementation guidance under Principle I (Alignment) to include reference to the Islamic banking industry.
This is emblematic of our ongoing efforts to spearhead and contribute substantially to thought leadership on sustainability for the banking industry as a whole, on the strength of Mr. Haneef’s leading reputation in the international Islamic banking and finance industry.
The results of his strategic efforts to-date include
(1) CIMB Islamic’s inclusion as a founding member of Bank Negara Malasia’s Value-Based Intermediation (VBI) Community of Practitioners, working to develop VBI together with the central bank to contextualize and drive sustainability with Islamic finance institutions in Malaysia.
(2) CIMB Islamic working with INCEIF (a globally leading university for Islamic Finance) to generate public-private research and discourse on how Islamic finance institutions can embark on sustainability, and
(3) Mr. Haneef serving as Organising Chairman of the Global Islamic Finance Forum 2018, an internationally recognized industry conference, whose theme centered on how the international Islamic banking and finance industry can embrace sustainability as a core driver of future growth and unveiling of VBI guidance documents for public consultation.
(4) Mr. Haneef is a founding trustee of RFI Foundation in the United Kingdom which is focusing on creating more awareness on sustainable finance and integrating Islamic finance with sustainable finance globally.