OCBC joins net zero banking alliance launched by the UN

SINGAPORE – OCBC Bank has joined a worldwide alliance of banks to strengthen and speed up the adoption of decarbonisation among these financial institutions.

The bank announced in a statement on Tuesday that it joined the Net Zero Banking Alliance, which was launched by the United Nations Environment Programme Finance Initiative (UNEPFI) in April 2021.

The bank said that, being part of the alliance, it commits to put greenhouse gas emissions attributed to its lending and investment portfolios on a path to net zero by 2050 or sooner.

It will also set emissions targets for 2030 – or sooner – within 18 months of joining the alliance and a 2050 target, as well as intermediate targets set every 5 years from 2030 till then.

OCBC Bank added that it will publish absolute emissions and emissions intensity every year in line with best practice and, within a year of setting targets, disclose progress against a board-level reviewed transition strategy setting out 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 elaborate in the statement what the approach entails.

The Straits Times has contacted OCBC Bank for comment.

The alliance seeks to provide an internationally coherent framework for member banks to operate in and guidelines they can follow while learning from each other, noted the bank.

There are currently 119 member banks across 41 countries in the alliance, representing close to 40 per cent of global banking assets amounting to US$70 trillion (S$99.7 trillion).

OCBC Bank is the second Singapore bank to join the alliance, after DBS in October 2021.

“For our part, joining the alliance reflects our commitment as a group to achieving net zero, not just in our operations, but also in our lending and investments businesses,” said OCBC Bank group chief executive Helen Wong in the statement.

“We want to help bring about progress that is measurable and broad-based; it should gain momentum 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 its greenhouse gas emissions hit net zero.

However, Singapore businesses expressed concerns about implementing more sustainable business models in two separate surveys, whose results were released in the last two days.

A survey of 800 small and-medium enterprises (SMEs) by DBS and Bloomberg Media Studios across six countries in Asia conducted in August found that SMEs acknowledge the need for more sustainable business models but are struggling to put their transition plans in place.

“This is because the post-pandemic economic environment has meant that business growth and survival is top of mind,” said DBS in a statement on Tuesday.

The survey also found that the top three challenges businesses cite in their transition plans are: lack of standardised measurement in reporting standards, lack of technical know-how in the market to implement environmental, social and governance frameworks and 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 over 1,000 respondents it polled incorporated sustainability into their businesses only to a moderate extent.

In a statement on Monday, the SCCCI said the top 3 challenges that hinder efforts by SMEs to pursue sustainability are: the high costs associated with sustainability practices, priority on business survival, and lacking capabilities and resources to understand and implement sustainability practices relevant to their businesses, echoing the DBS findings.