The momentum behind sustainable investment - however one defines it - appears to be as strong as ever. The Singapore-based lender aims to hit the $25 billion AuM market by the middle of the decade.
Singapore-based Oversea-Chinese Banking Corporation wants to manage more than $25 billion in sustainable finance by 2025 after beating its initial $10 billion target earlier this year – a sign of how environment-based investing remains a hot area.
The $10 billion AuM figure, achieved in the first quarter, was recorded two years ahead of schedule, the lender said, according to a report by The Straits Times. OCBC is the parent of Bank of Singapore.
Environmental, social and governance-themed (ESG) investing, and its “cousin” of impact investing have been strong growth areas over recent years, driven by a desire to use financial muscle to achieve goals such as cutting carbon emissions, improving clean water supplies, making companies more open and helping reduce crime and poverty. However, delivering accurate and meaningful data to clients on how ESG adds value to portfolios and brings about change, has been demanding. One worry at times has been so-called "greenwashing" - firms broadcasting their ESG credentials without necessarily delivering concrete results.
“The bank has seen a significant increase in the demand for sustainable financing in recent years due to better awareness and heightened efforts to combat climate change,” OCBC was quoted as saying.
A number of banks in Singapore and elsewhere, for example, have launched “Green bonds” – loans that finance environmentally-driven projects. United Overseas Bank and fellow Singaporean bank DBS have broadcast their work in this field (see here and here). Another recent player is Ping An of China Asset Management (Hong Kong), and one more is HSBC.
The report said that last year OCBC had seen a strong demand for green and sustainability-related borrowing. It participated in over 20 such loans, acting as sustainability advisor or coordinator for more than 10 of them. Last April, the bank said it would not finance new coal-fired power plants any longer.