SINGAPORE – OCBC Bank has joined a global alliance of banks to strengthen and accelerate decarbonization adoption among these financial institutions.
The bank announced in a statement on Tuesday that it had joined the Net Zero Banking Alliance, launched by the United Nations Environment Program Finance Initiative (UNEPFI) in April 2021.
The bank said that, as part of the alliance, it is committed to putting greenhouse gas emissions attributed to its loan and investment portfolios on a path to net zero by 2050 or earlier.
It will also set emissions targets for 2030 – or sooner – within 18 months of joining the alliance and a target for 2050, as well as interim targets set every 5 years from 2030 until then. .
OCBC Bank added that it will publish absolute emissions and emissions intensity annually in line with best practice and, within a year of setting targets, will disclose progress against a revised board-level transition strategy. Board of Directors defining proposed actions and climate-related policies.
It will also “take a robust approach” to the role of carbon offsets in transition plans, but did not specify in the statement what the approach entails.
The Straits Times has contacted OCBC Bank for comment.
The alliance seeks to provide an internationally consistent framework within which member banks can operate and guidelines they can follow while learning from each other, the bank noted.
The alliance currently has 119 member banks in 41 countries, representing nearly 40% of global banking assets of US$70 trillion (S$99.7 trillion).
OCBC Bank is the second Singaporean bank to join the alliance, following DBS in October 2021.
“For our part, joining the alliance reflects our commitment as a group to achieve net zero, not only in our operations, but also in our lending and investing businesses,” said Helen Wong, group chief executive. OCBC Bank, in the press release.
“We want to help achieve measurable, large-scale progress; it should grow over time and be irreversible.
The news comes as Deputy Prime Minister Lawrence Wong confirmed at the opening of Singapore International Energy Week (SIEW) on Tuesday that the Republic will set 2050 as the year when its greenhouse gas emissions will reach net zero.
However, businesses in Singapore have raised concerns about implementing more sustainable business models in two separate surveys, the results of which were released in the past two days.
An August survey of 800 small and medium-sized enterprises (SMEs) by DBS and Bloomberg Media Studios in six Asian countries found that SMEs recognize the need for more sustainable business models, but struggle to implement their transition plans.
“That’s because the post-pandemic economic environment means business growth and survival is a priority,” DBS said in a statement Tuesday.
The survey also revealed that the top three challenges cited by companies in their transition plans are: lack of standardized metrics in reporting standards, lack of technical know-how in the market to implement frameworks and environmental, social and governance solutions, and lack of funding.
Meanwhile, the Singapore Chinese Chamber of Commerce and Industry (SCCCI) found in its annual business survey that most of the more than 1,000 respondents have integrated sustainability into their businesses only to an extent. moderate.
In a statement on Monday, the SCCCI said the top 3 challenges hindering SMEs’ efforts to pursue sustainability are: high costs associated with sustainability practices, priority to business survival and lack of capabilities. and resources to understand and implement sustainability practices relevant to their businesses, echoing the findings of the DBS.