Standard Chartered Malaysia has entered into an environmental, social and governance (ESG)-linked derivative transaction worth RM251 million with beverage manufacturer, distributor and marketer Etika Group of Companies.
This marks the first such transaction executed by a homegrown fast-moving consumer goods (FMCG) corporate in Malaysia.
The structure of the transaction involves a pricing mechanism where a discount or premium will be applied depending on whether Etika achieves the pre-agreed sustainability-related key performance indicators (KPIs) that are tied to the greenhouse gas emissions intensity of Etika’s beverage and dairy plants.
The KPIs are in support of Etika’s sustainability commitments to promote environmentally conscious practices within the FMCG industry.
Standard Chartered Malaysia managing director and chief executive officer Abrar A. Anwar commended Etika’s move to take ownership in reshaping the group’s sustainability plans to address current environmental and social concerns.
“There’s a real opportunity for banks to have a positive impact as it boils down to moving capital to where it matters most and Standard Chartered is making big strides in the roll-out of more innovative ESG-related solutions within our derivatives offering in Malaysia.
“Essentially, helping our clients in their sustainability aspirations also contributes to our own ESG ambitions. The bank aims to achieve net zero carbon emissions from our financing by 2050, as part of our strategic commitment to put the world on a sustainable path to a zero-carbon economy,” he said.
Etika Group of Companies (Malaysia, Singapore and Brunei) chief executive officer Khalid Alvi said with growing concerns about the environment, there is an urgent need to build innovative solutions to combat pressing challenges such as plastic pollution, increasing emission of greenhouse gases and waste management.
“Taking this into consideration, at Etika, we have shaped our group sustainability initiatives to emerge as a greener business with a focus on implementing better practices for our consumers, communities, and environment. As such, we are happy to have the support of partners like Standard Chartered in our journey to achieving our sustainability commitments,” he said.
Etika has embarked on several goals in their mission towards being an all-round sustainable organization. The company has a target to reduce its Scope 1 and Scope 2 carbon emissions by 20% by 2030 and aims to achieve net zero carbon emissions by 2050.
The Etika Group is involved in the manufacturing, distribution and marketing of some of PepsiCo’s global brands such as Pepsi, Tropicana, Mountain Dew, Revive Isotonic, Mirinda, 7UP, Lipton Ice Tea, Gatorade, Sting, Evervess, Kickapoo, and its own range of products which include Wonda Coffee, Goodday Milk, Calpis, Dairy Champ, Hijrah, Chill Asian Drinks and Bleu.
Standard Chartered Bank provides a comprehensive range of financial solutions to corporates, institutions and individuals through its network of branches across Malaysia. The Bank has an Islamic banking subsidiary, Standard Chartered Saadiq; a global shared services centre, Standard Chartered Global Business Services; a sales arm, Price Solutions and an offshore facility in Labuan. Standard Chartered employs over 7,000 employees in all its Malaysian operations.
