MARC Ratings has assigned a “Gold” Impact Assessment to Bank Kerjasama Rakyat Malaysia Berhad’s (Bank Rakyat) Sustainability Sukuk Framework. The framework has been established to set the guiding principles for Bank Rakyat’s issuance of Sustainability Sukuk for eligible projects that contribute towards environmental and social benefits.

Bank Rakyat is the largest Islamic cooperative bank in Malaysia that offers a range of Shariah-compliant financial products and services to individuals and businesses. As a development financial institution, the bank fulfils its mandate by providing financing, advisory, and training to micro, small and medium enterprises and cooperatives, as well as improving financial accessibility for the underserved social groups. The Sustainability Sukuk is expected to support and expand Bank Rakyat’s green and social financing portfolio, in alignment with Bank Negara Malaysia’s Implementation Guide for Value-Based Intermediation, and the Climate Change and Principle-based Taxonomy.

Proceeds raised from the issuance of the Sustainability Sukuk will be channelled towards eligible businesses and projects that address eight of the 17 United Nations Sustainable Development Goals (UN SDGs).

We opine that the framework is aligned with the core components of the Sustainable and Responsible Investment Sukuk Framework of the Securities Commission Malaysia; the Green Bond Standards, Social Bond Standards, and Sustainability Bond Standards of the ASEAN Capital Markets Forum; and the Green Bond Principles, Social Bond Principles, and Sustainability Bond Guidelines of the International Capital Market Association, among others.

The Gold assessment of the framework reflects the view that the impact from channelling proceeds to the identified businesses and projects would provide relevant social and environmental benefits that support eight of the 17 UN SDGs.