Bali. Malaysian banking giant Maybank has announced that it was almost halfway done to reaching its goal of mobilizing RM 50 billion, or about $11 billion, in sustainable financing by 2025.

At Maybank’s recent Sustainability Day event, the bank reported that as of July it had mobilized about RM 24 billion in sustainable finance, of which most went to Malaysia and Singapore. The bank's sustainable financing for Indonesia, however, is still small, according to Maybank chief sustainability officer Shahril Azuar Jimin.

“Right now, the amount for Indonesia is still small. But we do realize its potential and have identified the sectors that we can support,” Shahril said during a recent visit to Benoa, Bali.

When asked if there were any specific challenges that led to the smaller sustainable finance portion in Indonesia, Shahril said that the challenges were actually not peculiar to the country. Like in most parts of the world, the awareness of customers —particularly small and medium enterprises (SMEs)— is one of the main challenges to sustainable finance.

“They need to understand the need to transition to sustainable practices before they can go into sustainable finance. This problem is especially inherent in SMEs. There is a saying in the world of sustainability: ‘it is difficult to be green if you are in the red’,” Shahril told the Jakarta Globe.

Government support is crucial to fostering sustainable finance adoption.

“This includes coming up with various frameworks, regulations, and taxonomies. In that respect, Indonesia is progressing very fast. Bank Indonesia and OJK [Financial Services Authority] are coming up with various taxonomies to position this. And what has greatly helped was the launch of the ASEAN Taxonomy,” Shahril said.

Last November, ASEAN unveiled its first edition of the ASEAN Taxonomy — a  framework to help guide capital towards more sustainable business activities. The taxonomy aims to serve as a common language across the bloc’s member states on sustainable finance.

“There are also a lot of green deals coming out of Singapore because of the Singaporean government’s support in terms of green housing loans, green mortgages, and so on,” he told the Globe.

The Sustainable Day event also saw the launch of Maybank's Sustainable Product Framework. This framework aims to enable greater development of green, social, and sustainable products. Maybank announced that the framework would take effect across the bank’s Islamic and conventional products starting on Sep. 1. 

"The Sustainable Product Framework gives us that basis to provide eligibility and opportunities for our customers," Shahril said.