Southeast Asia’s second-largest financial institution OCBC is prone to be part of Singapore rival DBS in updating its coal coverage to permit the financing of early coal phase-outs according to standards specified by the city-state’s nationwide taxonomy, which launched final December.
The lender’s group chief sustainability officer (CSO) Mike Ng advised Eco-Enterprise in a written assertion that the financial institution “will likely be trying to take part in coal phase-out tasks by way of a revision of [its] coal financing coverage”.
“We stay dedicated to directing capital away from fossil fuel-based applied sciences towards applied sciences that facilitate the scaling up of unpolluted and renewable power and its supporting infrastructure, in addition to different decarbonisation options,” mentioned Ng, who was appointed the financial institution’s first CSO in July final 12 months.
Eco-Enterprise understands that the coal coverage has not but been amended, although an OCBC spokesperson reiterated that the financial institution is “presently engaged on revising [its] coal financing coverage to align with the taxonomy’s standards.”
Final month, DBS revealed that it has adjusted its coal coverage to accommodate the financing of managed coal phase-out tasks at a media briefing for its annual sustainability report. The lender additionally shared that it’s already engaged on an early retirement deal.
In response to Eco-Enterprise queries on the time frame for utterly exiting coal, the OCBC spokesperson responded that its “prior dedicated publicity to coal-fired energy vegetation and thermal coal mines will likely be section out by 2040.” Each of its Singapore-based friends, DBS and UOB, have dedicated to do the identical by 2039.
OCBC’s current coal financing commitments embody the 1.2 gigawatt Nghi Son 2 plant in Vietnam, which started building in 2018 and is predicted to proceed working till 2043. This might fly within the face of the Worldwide Power Authority (IEA)’s name to section out all unabated coal technology by 2040 to ensure that the world to have a shot at limiting warming to 1.5 °C.
When requested if its present coal restrictions apply past undertaking financing to normal function company lending and capital markets facilitation – which critics have identified are loopholes that permit banks with exclusion insurance policies to proceed financing the polluting power supply – the financial institution confirmed that it does have restrictions in place for company lending.
The spokersperson advised Eco-Enterprise it doesn’t finance purchasers with over half of their complete income derived from coal-fired energy vegetation or thermal coal mines. Nonetheless, it’s unclear if this extends to capital market facilitation, like bond underwriting.
Inexperienced hush amongst high Singapore banks?
OCBC’s newest sustainability report, revealed earlier at this time, confirmed that it’s on monitor to fulfill all six sector-specific net-zero targets that it introduced final Might.
Since 2021, the lender has reduce about 9 per cent of its financed emissions depth within the energy sector. Absolutely the financed emissions from its oil and gasoline portfolio additionally got here down by 19 per cent in 2022, in comparison with the 12 months earlier than. The 4 different precedence sectors – actual property, metal, aviation and delivery – have both outperformed or are according to their reference trajectories.
Nonetheless, not like DBS, the financial institution didn’t maintain a media briefing for its sustainability report this 12 months.
When requested in regards to the causes for this, a spokesperson advised Eco-Enterprise that the financial institution selected not to take action after in depth discussions given the constructive progress they’ve made in assembly their decarbonisation targets and the truth that they’re all detailed within the report.
Final month, Singapore-based peer UOB additionally launched its most up-to-date sustainability report with out holding a media briefing, regardless of stating in the identical report that the media is a stakeholder they recurrently search to have interaction by way of numerous means, together with media briefings and conferences “as and when acceptable”.
Suzy Goulding, head of sustainability, Asia Pacific, Center East & Africa for public relations agency MSL Group advised Eco-Enterprise that “it’s troublesome to say whether or not that is greenhushing or not.”
The time period “inexperienced hush” refers back to the rising phenomenon the place firms chorus from speaking their inexperienced credentials out of worry they are going to be known as out for greenwashing.
“I don’t know sufficient about both banks’ strategy to media relations, however with OCBC and UOB each making good progress on their targets, I’d have anticipated a media briefing,” mentioned Goulding.
“In fact this additionally relies on whether or not each banks have traditionally opted for this… Possibly they felt that there was nothing actually new within the report that warranted a media briefing, as shifting ahead with their decarbonisation targets is now simply ‘enterprise as ordinary’ for them?”
UOB is equally on monitor to fulfill its internet zero targets for its six high polluting sectors prior to now 12 months, as outlined in its first progress report final October, the place it remained between 7 to 14 per cent beneath the goal reference pathways.
The lender additionally launched a brand new environmental, social and governance (ESG) threat monitoring system, dubbed the “ESG Adversarial Information Surveillance System”, which is supposed to alert related relationship managers to purchasers hit by any hostile ESG information, to allow them to assess if there’s any non-compliance with the financial institution’s insurance policies.
In 2023, UOB prolonged S$19.5 billion (US$14.5 billion) in new sustainable financing to corporates, a comparable quantity to the S$19 billion (US$14 billion) and S$14 billion (US$10.4 billion) that DBS and OCBC remodeled the identical interval.
“Although we’re simply speculating right here on why they each selected to quietly launch their newest sustainability reviews, I nonetheless assume it’s disappointing when firms don’t proactively talk their progress – or in any other case – of their sustainability actions, whether or not because of the threat of greenwashing accusations or different causes,” mentioned Goulding.
“Not solely does this imply that they don’t profit from the constructive reputational affect available, however it additionally hinders firms in comparable sectors from studying from one another, which is essential if the enterprise group desires to maneuver ahead collectively at a quicker tempo.”
