OCBC, DBS and UOB have responded to a report by a Green group about their funding of coal projects, highlighting how pressures to cut carbon emissions are a source of controversy.
A newspaper report says Singapore’s three major banks – DBS, OCBC and UOB – are “significant” funders of coal projects in the region, even a number of large banks are cutting investment in coal in the face of pressure to reduce carbon emissions.
The Straits Times (of Singapore) the banks have adopted sustainable financing guidelines, saying they consider each investment with regards to environmental impact versus the need to bring electricity to millions of people. The ST quotes Market Forces, an Australian financial green group that conducted a study that says funding of coal contradicts the need to cut greenhouse gas emissions. The group reportedly said DBS Bank, Oversea-Chinese Banking Corporation and United Overseas Bank have financed 21 coal project deals since 2012 worth $2.29 billion, more than half of which were for coal-fired power stations, mainly in Indonesia and Vietnam.
The ST report said the Market Forces group analysed data from IJGlobal, an online energy and infrastructure finance data service, relating to the deals.
The publication quoted a DBS spokesperson as saying: "According to the International Energy Agency, while South-east Asia is taking steps towards adopting low-carbon energy, by 2040, coal will still account for 40 per cent of the generation mix. Many of our neighbouring developing countries are dependent on coal as part of their energy mix to deliver economic growth, and the financial system has a responsibility to ensure that the transition to renewables happens in a sustainable manner.”
OCBC Bank chief risk officer Vincent Choo was quoted as saying: "The financing of energy sector projects, where environmental impact is mitigated in compliance with national and local laws and regulation, enables local communities to gain access to electricity and opens up employment opportunities."
A UOB spokesperson was quoted saying the bank was committed to responsible financing to support sustainable development and to mitigate environmental, social and governance risks in its lending.