Banking on Sustainability

Despite its origins in Singapore, OCBC Bank has a special place in the psyche of Kuala Lumpur with its head office being the backdrop of the famous Masjid Jamek at the confluence of the river that gave the city its name. More than just glass and concrete, the bank is also intrinsically tied to the city with its annual Kuala Lumpur OCBC Cycle event where hundreds of cyclists descend onto the streets, taking it over from automobile in promotion of a healthier way of living.

While some find it a great way for a corporation to give back to the community, OCBC sees it as more than that and is confidently going all in on investing in sustainability as its core business strategy. Syed Abdull Aziz– CEO of the bank’s Islamic banking arm, OCBC Al-Amin – says that in its goal towards sustainable finance, the bank and its parent group are firmly committed, even when it requires certain sacrifices.

“In this pivot, we have to sacrifice short-term gains for long-term sustainability. We can’t really do financing for certain industries that perhaps damage the environment and that’s a loss of business really,” says Syed Abdull Aziz.

However, the bank believes that the loss is worth taking not only ethically but also financially with all the businesses that would come from entities that see the bank as an ally for sustainability further down the road. “So, we have to sacrifice it. But in the long term, we will gain.”

When asked what motivated the 87-year-old institution to make such a move, the answer was refreshingly straightforward, simple yet powerful. “It is for the greater good of all – for the whole public, for the world, for the planet,” says Syed Abdull Aziz.

Despite calling it a long-term pivot, this strategy has already resulted in a major win for OCBC Al-Amin with the successful pricing of RM245 million in a Sustainable and Responsible Investment (SRI) sukuk arranged by the bank in late 2019 for a solar power plant in Malaysia.

Describing it as a milestone deal for the bank, Syed Abdull Aziz says the deal highlighted OCBC Al-Amin’s commitment to sustainability and promotes to others that the organisation really supports green technology. “We have increased intensity of our marketing, business engagement with the government as well as with the industry, and are looking for opportunities in green technology,” he says.

The move also sets the bank apart from its peers when it comes to talent acquisition, particularly among younger graduates who are more in tune and concerned with climate change issues and want to play a role in combatting it. According to Syed Abdull Aziz, unlike previously when companies do the questioning, young graduates who come for interviews today are keen on getting direct information from the bank on its commitment to the nature, society and digitalisation. “When you pivot your whole value system towards that, it will attract a lot of other things. You’ll attract all the other stakeholders who come in, pat you on the back and tell you that you’ve done a good thing here. Those stakeholders include our employees,” says Syed Abdull Aziz.

With his 30 years’ experience in banking since graduating from Boston University, Syed Abdull Aziz shares that the business of banking is more than just technical accounting skills or financial know-how but more importantly perhaps is the human touch. “At the first bank I worked for, I realised that there are graduates in philosophy, in engineering… it was mind boggling at that point in time to see. Why do you have philosophy or psychology graduate working in a bank? Then I realised it’s not just the finance or accounting part but you also need to have soft skill,” he says.

His experience changed his initial perception that banking is a cutthroat business akin to what is shown in the movies where people suppress others and do unethical things. What he found instead is a highly competitive industry where a lot of collaboration is taking place. “With all these exciting changes that are happening in banking, the truth remains that banking at the end of the day is built upon trust. That is fundamental and will never change, but how you build trust changes with the time,” says Syed Abdull Aziz.