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Catalyse Economic Advancement
Building a Prosperous Nation
Progressing with Our Sustainability Commitments
Continued Strength In Governance
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In the pursuit of the nation's prosperity
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Creating a Sustainable and Inclusive Future
PNB recognises that the future is shaped by the actions taken today and is deeply committed to creating a sustainable and inclusive future that benefits not only its stakeholders but also the communities it serves.
Towards a Net Zero Future
Guiding Beliefs
10 ESG Commitments
Our Sustainability Framework will help us enhance and protect the value we create for our stakeholders while fulfilling our own sustainability aspirations. Our 10 commitments under the three pillars of Environment, Social, and Governance are aligned with global endeavours for peace and prosperity by 2030 under the United Nations Sustainable Development Goals (UN-SDG).
Net Zero Enterprise by 2025
Net Zero Portfolio by 2050
RM10 billion in New Green & Transition Assets by 2030
- We are committed to reducing GHG emissions, focusing firstly on our operations and direct sources under our control. We developed an enterprise net zero pathway by measuring our baseline emissions and charting a pathway for decarbonisation initiatives.
- In year 2022 we set our baseline for direct and indirect GHG emission.
- To accelerate our transition, we introduced R2O, a three-step approach: Reduce, Replace and Offset.
Reduce
Replace
Offset
Reduce
Prioritise emission reduction initiatives
- Mapping of emission and baselining
- Define high impact carbon reduction initiatives
- Incorporate ESG values in daily operations
- Engage and educate radically via strategic ESG communications
Replace
Efficiency improvement leading to reduced GHG emissions
- High impact equipment replacement initiatives
- Targeted emission reduction activities
- Assessment on availability of technology in the market
- Change management and engagement
Offset
Purchase carbon offsets of remaining hard-to-abate GHG emissions
- Alignment with credible standards in offsetting
- Prioritise nation-building initiatives
- Verifiable anad credible projects
- Our efforts span Scopes 1, 2, and 3, include investing in green buildings, procuring green energy, promoting ESG cultural change, forming dedicated taskforces, implementing other decarbonisation measures and green initiatives.
- We participated in Bursa's voluntary carbon market and PLC Transformation Programme (PLCT), aiming to elevate Malaysia's public-listed companies into high-performing and sustainable entities.
- Relocation to Merdeka 118, the triple platinum rated green building will reduce our Scope 2 emissions.
- We will also tackle Scope 3 emissions progressively, offsetting unavoidable greenhouse gases.
PNB'S Enterprise Emission Reduction Initiatives
Green Energy Procurement
Secured 132 MWh (~20% of scope 2 emissions) of green energy through the green electricity tariff (GET) programme from TNB.
Energy Efficiency
Relocation of office to
Merdeka 118,
a triple platinum rated
building which
includes ratings from
LEED, Green Estate
(GreenRE) and Green
Building Index (GBI).
ESG Culture Change
Align and incorporate sustainability into PNB's operations, business culture and individual behaviour to achieve net zero target.
Baselining Methodology
Our Enterprise emissions approach is based on the GHG Protocol, measuring operational emissions using activity data and emission factors from globally recognised databases.
Our Enterprise emissions include Scope 1, Scope 2 and Scope 3 GHG emissions from PNB corporation (PNB HQ and ASNB) and at operating subsidiaries and branches operational emissions (i.e., PNBD, PNBC, PHNB, PNBMV, Attana Hospitality Group, PNBRI, PNB UK) as of FY2024.
| tCO₂e | FY22 | FY23 | FY24 | ||
|---|---|---|---|---|---|
| Emission Scope | Location-based | Location-based | Market-based | Location-based | Market-based |
| Scope 1 | 203 | 155 | 283 | ||
| 1.1 Stationary combustion | 3 | 6 | 8 | ||
| 1.2 Mobile combustion | 200 | 149 | 133 | ||
| 1.3 Fugitive emmision | NA | NA | 142 | ||
| Scope 2 | 6,028 | 6,140 | 4,045 | 5,057 | 1 |
| Purchased electricity | 6,028 | 6,140 | 4,045 | 5,057 | 1 |
| Scope 3 | 22,811 | 26,813 | 26,200 | ||
| 3.1 Purchased goods and servies | 9,274 | 11,933 | 18,453 | ||
| 3.2 Capital goods | 7,067 | 9,654 | 1,892 | ||
| 3.3 Fuel and energy related | 709 | 864 | 117 | ||
| 3.5 Waste generated in operations | 61 | 55 | 89 | ||
| 3.6 Business travel | 1,314 | 1,848 | 2,661 | ||
| 3.7 Employee commuting | 4,387 | 2,459 | 2,988 | ||
| Grand Total | 29,042 | 33,108 | 33,013 | 31,540 | 26,484 |
Portfolio
We are committed to reducing real world GHG emissions through our investee companies. This is supported by our three quantitative targets, as reported in Net Zero Portfolio. In addition, we commit to not invest in any new greenfield coal investments and will incorporate an NDPE approach in our investments. We will continue to champion ESG and lead the investing community in sustainability by actively advocating sustainability practices among our portfolio companies. In this instance, we aim to align our ESG practices and commitments with the guidelines of the Principles for Responsible Investment (PRI), the PCAF and the UN Global Compact (UNGC), of which we are members.
- The shift to a low-carbon economy demands collaborative action among stakeholders to create a green value chain and curb financed emissions.
- We are resolute in decreasing real-world GHG emissions through our portfolio companies. Our dedication is reinforced by our three 2050 Net Zero Portfolio targets.
2050 NET ZERO
PortfolioBaseline GHG emissions cover ~84% of AUM
(listed equities, corporate bonds, real estate and private markets)70%
Of portfolio emissions to have credible Net Zero targets by 2030
30%
Investment emissions intensity (tCO2e / RM Million AUM) reduction by 2030 (vs. 2022)
RM10 Billion
Invested in new green and transition assets by 2030
No direct greenfield coal
No deforestation, no peat, no exploitation approach
- These emissions are calculated based on Scope 1 and 2 emissions from our investee companies, primarily domestic equities and investments.
- We aim to measure Scope 3 emissions of our portfolio companies in accordance with Partnership for Carbon Accounting Financials (PCAF) criteria and we will adopt a just transition approach towards low-carbon economy.
- We have pledged against investments in direct greenfield coal projects and adopt no deforestation, no peat and no exploitation (NDPE) approach in our investments.
- We aim to prioritise engagement with our investee companies in high emitting sectors, champion ESG and lead sustainability practices in our portfolio companies.
- Our goal is to align our ESG practices and commitments with Principles for Responsible Investment (PRI), Partnership for Carbon Accounting Financials (PCAF), and UN Global Compact (UNGC) guidelines, of which we are members.
Baselining Methodology
Our Portfolio emissions approach is guided by PCAF's methodology for carbon accounting in the financial sector. Our 2030 emissions reduction progress is compared to 2022, the baseline year. Our portfolio carbon footprint is calculated using an enterprise value approach.
Our Portfolio emissions are attributable to Scope 1 and 2 from our listed equities, corporate bonds, private equity (direct and co-investments) and real estate holdings, which account for 80-90% of our assets under management (as of December 2022). For financed emissions, we used methodologies published by PCAF where available.
PNB's 2022 GHG Emissions by Portfolio
PNB's Portfolio Emissions by Holding Type, by Geography and by Sector (Million tCO2e)
We classify emissions from our real estate holdings (domestic and international) as part of our portfolio emissions, as they are treated as investments in our portfolio. Currently, we are engaging our investees to disclose their Scope 3 emissions. Limitations regarding Scope 3 emission estimates are noted in the PCAF Standard: "PCAF acknowledges that, to date, the comparability, coverage, transparency, and reliability of Scope 3 data still varies greatly per sector and data source.
SCOPE 1 AND 2 EMISSIONS
GHG Emissions by Holding Type 1
~83% GHG emissions are from domestic equities
% share of AUM2
GHG Emissions by Geography
~95% GHG emissions are from domestic investments
GHG Emissions by Sector
~86% of GHG emissions from Plantation, Utilities, Oil & Gas and Construction
Notes
- GHG emissions exclude sovereign bonds given that sovereign bond emissions of Scope 1, 2 & 3 are combined and reported separately.
- Percentage of AUM estimated based on reported value of holdings as of December 2022.
- Including direct corporate bond exposure to the company.
Through our RM10 billion commitment, we aim to invest in specific thematic areas that are aligned with our climate aspirations while unlocking new investment opportunities. Our investment objectives are guided by these principles:
Support climate change mitigation and adaptation
Enhance measures that prevent pollution
Ensure efficient use of resources to support a circular economy
Enhance the preservation of biodiversity, marine life and ecosystem
Our focus is on four key sectors are namely transport, buildings, power, Agriculture, Forestry and Other Land Use (AFOLU).
- Our Enterprise emissions approach is based on the GHG Protocol, measuring operational emissions using activity data and emission factors from globally recognised databases.
- When data is scarce, we estimate using spend data. We are actively enhancing activity tracking across units to refine our emissions data.
- Our 2030 emissions reduction progress is compared to 2022, the baseline year. Our portfolio carbon footprint is calculated using an enterprise value approach.
PNB's GHG Emissions Performance
In 2022, our GHG emissions were
11.88 million tCO2e
Investment emissions intensity:
49 tCO2e/ RM million AUM
% of AUM baselined:
Approximately 84%
PNB GHG emissions baseline estimates1, Million tCO2e
Portfolio
We are committed to reducing real world GHG emissions through our investee companies. This is supported by our three quantitative targets, as reported in Net Zero Portfolio. In addition, we commit to not invest in any new greenfield coal investments and will incorporate an NDPE approach in our investments. We will continue to champion ESG and lead the investing community in sustainability by actively advocating sustainability practices among our portfolio companies. In this instance, we aim to align our ESG practices and commitments with the guidelines of the Principles for Responsible Investment (PRI), the PCAF and the UN Global Compact (UNGC), of which we are members.
PNB's Enterprise Emissions Consolidated (tCO2e)
| Scope 1 | Backup generators | 3 | <1% |
|---|---|---|---|
| Company vehicles | 200 | 1% | |
| Scope 2 | Purchased electricity | 4405 | 16% |
| Total Scope 1 & 2 | 4608 | 17% | |
| Category (Scope 3) | 1. Purchased goods & services1 | 9,274 | 34% |
| 2. Capital goods2 | 7,067 | 26% | |
| 3. Fuel and energy-related | 719 | 3% | |
| 4. Waste generated | 32 | <1% | |
| 5. Business travel | 1407 | 5% | |
| 6. Employee commuting | 4,387 | 16% | |
| Total Scope 1,2,3 | 27,494 | 100% | |
PNB's Portfolio Emissions by Holding Type, by Geography and by Sector (Million tCO2e)
We classify emissions from our real estate holdings (domestic and international) as part of our portfolio emissions, as they are treated as investments in our portfolio. Currently, we are engaging our investees to disclose their Scope 3 emissions. Limitations regarding Scope 3 emission estimates are noted in the PCAF Standard: "PCAF acknowledges that, to date, the comparability, coverage, transparency, and reliability of Scope 3 data still varies greatly per sector and data source.
PCAF
(Partnership for Carbon Accounting Financials)
PRI
(Principles for Responsible Investment)
UNGC
(UN Global Compact)
SIS
(Sustainable Investing Standards)
JC3
(Joint Committee on Climate Change)
Through our RM10 billion commitment, we aim to invest in specific thematic areas that are aligned with our climate aspirations while unlocking new investment opportunities. Our investment objectives are guided by these principles:
Support climate change mitigation and adaptation
Enhance measures that prevent pollution
Ensure efficient use of resources to support a circular economy
Enhance the preservation of biodiversity, marine life and ecosystem
Our focus is on four key sectors are namely transport, buildings, power, Agriculture, Forestry and Other Land Use (AFOLU).
Living wage by 2023
Labour Rights Policy
40% women in PNB leadership by 2025
Balancing profitability and social investments
PNB prioritises workplace equity and equal opportunities. We ensure fair compensation through our Living Wage Framework since January 2023.
We introduced the PNB Labour Rights Policy in 2022 to shape our priorities and ensure effective management of issues around labour rights at PNB, as we believe in the well-being of our employees, the employees of our investee companies, our suppliers and vendors.
Our Labour Rights Policy underscores our stance on 6 Key Material Issues:
- 1. Forced & Child Labour
- 2. Fair Wages & Benefits
- 3. Diversity & Inclusion
- 4. Freedom & of Association
- 5. Safety & Health
- 6. Upskilling & Education
For more information, please refer to:
PNB Labour Rights Policy FAQ on PNB Labour Rights Policy (Policy)PNB fosters an inclusive work environment, that values each employee. With a gender-balanced workforce and 36% women in senior management which exceeds global benchmark, we target 40% women in PNB Leadership by 2025.
PNB plays a prominent role in revitalising Malaysia's socio-economic development. Our commitment to the betterment of society through our CSR programmes will continue unabated. Our funding for CSR initiatives encompasses these four pillars:
- Pillar 1: Education
- Pillar 2: Health
- Pillar 3: Community Development
- Pillar 4: Environment
Triple Bottom Line (TBL) Stewardship Model
Transparency in Voting
Task Force on Climate-related Financial Disclosures (TCFD)-aligned Disclosure
- With over 50% of our assets under management invested in Strategic & Controlled Companies, PNB is not only obligated but also responsible for ensuring that these companies are able to deliver long-term shareholder value.
- We aim to boost performance by enhancing the effectiveness of Boards and Management Teams, which are crucial for the long-term success of our investee companies.
- We believe that governance goes beyond compliance and involves effective engagement with investee companies to promote transparency and accountability.
PNB prioritises transparency by openly sharing our voting policy and actual votes.As part of our investment stewardship responsibilities, we also engage actively with management, boards and shareholders of the investee companies in fostering strong marketplace accountability.
We are addressing climate change in our business and have adopted TCFD recommendations in our integrated annual report. This helps to inform stakeholders about our climate governance, strategies, opportunities and risk management. We value transparency and take the lead in exemplifying corporate responsibility on this issue.