The CRST results were incorporated into our Climate Sector Review Framework for further analysis at the business line and economic sector levels to identify potential risks and opportunities for strategy development. They were also applied in our Internal Capital Adequacy Assessment Process (ICAAP) to evaluate the impact of climate-related risks on our capital position and adequacy over relevant time horizons. Moving forward We recognise that climate risk management is a developing and dynamic field, with data availability posing a significant challenge across the financial sector. We remain committed to continuously improving our climate risk management approach and enhancing our capabilities in this area. Our key focus for 2025 will be to strengthen our climate risk stress testing framework to successfully deliver the BNM CRST exercise within the December 2025 timeline. Additionally, we aim to improve data collection processes and data quality, which are critical for effective climate stress testing and overall risk management. To address data gaps, we will continue leveraging external data sources and proxies to supplement and enrich our internal data. This ongoing effort will enable us to gain a deeper and more quantitative understanding of our climate risk exposure, ultimately allowing us to provide more comprehensive and transparent disclosures. Harnessing the Power of the Sun: A Revolution for Mersing’s Fishermen The daily rhythm of the fisherman’s life in the coastal town of Mersing, Johor, has remained unchanged for generations. Yet, for 21 local fishermen, a quiet revolution is underway. Through Bank Islam’s innovative social finance catalyst, Sadaqa House, their traditional wooden boats are now equipped with photovoltaic (PV) solar systems, anticipating a brighter and more sustainable future. Fuel costs and unreliable power sources have been issues they faced daily for years. Kamaruddin Abas, a fisherman for over 23 years, recalls the challenges: “We used to depend entirely on fuel generators to power our boat lights and equipment. But when fuel prices soared, it became harder to make ends meet.” Introducing solar-powered systems and upgrading these fishermen's boats into Smart Eco-PV Boats has been transformative. These PV systems generate clean energy to power essential tools like fish finders, navigation and emergency systems, and night-time lighting, reducing reliance on diesel fuel. The estimated monthly savings of RM150 allow fishermen like Kamaruddin to have excess income to support their families. Moreover, the usage of solar panels provides environmental benefits. They reduce water and sound pollution and carbon emissions, contributing to the preservation of Mersing’s marine ecosystem. “I thank Bank Islam, donors under Sadaqa House, and their partners, Universiti Teknologi Malaysia (UTM) dan Fisheries Development Authority of Malaysia (LKIM) for providing us with the convenience and savings. The system brings us peace of mind, especially in an emergency, and enables us to operate more efficiently at sea,” said Kamaruddin. Bank Islam’s commitment to empowering underbanked communities together with generous Malaysian donors under Sadaqa House through sustainable solutions reflects our vision for inclusive and sustainable progress. Through our collaborative efforts, we reaffirm our commitment to positively impacting the community and environment. 135 www.bankislam.com 01 02 03 04 05 SUSTAINABILITY STATEMENT 06 07 08 09
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