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DBS becomes first bank in Southeast Asia to announce landmark set of decarbonisation commitments

Felicia Tan
Felicia Tan • 3 min read
DBS becomes first bank in Southeast Asia to announce landmark set of decarbonisation commitments
The bank has set decarbonisation targets in seven sectors and data coverage targets in two sectors. Photo: DBS
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DBS Group Holdings, on Sept 13, announced that it has made sectoral targets that are aligned with science-based decarbonisation glidepaths in its report, “Our Path to Net Zero – Supporting Asia’s Transition to a Low-carbon Economy”.

Glidepaths refer to the carbon emission pathway to the desired target set.

According to the bank’s report, it has set decarbonisation targets in seven sectors that include power, oil and gas, automotive, aviation, shipping, steel and real estate. The decarbonisation targets go beyond the bank’s institutional banking lending book and will cover capital markets activities. In addition, the bank has set data coverage targets in two sectors, food and agribusiness and chemicals.

The nine sectors, which make up some 31% of the bank’s outstanding loans, represent the most carbon-intensive banking segments financed by the bank.

Among the seven decarbonisation targets set, six of them – power, automotive, aviation, shipping, steel and real estate – are set as intensity metrics with the objective to achieve lower emissions per unit of output or activity.

An absolute emissions reduction target has also been set for the oil and gas sector. The bank has targeted to reduce the absolute emissions in the sector attributable to DBS by 28%. The bank’s oil and gas target will cover Scope 1, 2 and 3 emissions.

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The range of sectors covered makes DBS’s commitment one of the most comprehensive ones within global banks. Its targets are also being benchmarked against internationally recognised and industry-accepted glidepaths such as The International Energy Agency’s Net Zero Emissions by 2050 Scenario (IEA NZE).

Piyush Gupta, CEO of DBS says, “Our firm conviction is that our net zero commitment, made last October, must be supported by a clear and detailed roadmap and plan. However, charting a viable course of action that is constructive and impactful is not easy, given challenges in mapping out suitable industry pathways and realistic medium-term milestones in markets with differing starting points.”

“That is why I am pleased that we are able to announce today a set of ambitious, broad and measurable actions that we can execute against. The decarbonisation targets will act as the ‘north star’ for our financing activities guiding us to net zero by 2050 through measurable change,” he adds.

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Following the announcement, DBS says it aims to encourage and enable its institutional banking customers to pivot their business strategies and accelerate their transition journeys. These could be achieved in several ways including providing them with sustainable and transition finance solutions, it adds.

Tan Su Shan, group head, institutional banking group at DBS says, “Our ability to achieve our net zero ambition relies heavily upon the success of our clients in delivering their own transition plans. In the past few years, we have seen a significant increase in the demand for green and sustainable finance solutions.”

“To accelerate the transition and meet the vast investment needs in the next few decades, we will proactively partner our customers, providing them with financial advisory and transition finance solutions, as we collectively work towards a low-carbon future,” she adds.

Further to his statement, Gupta says, “Decarbonisation cannot be achieved in silos – the global banking and business community, and world leaders have a part to play in balancing the climate agenda, social equity and economic development. Collectively, we must exercise leadership by working towards a balanced, sustainable and just transition.”

As at 12.06pm, shares in DBS are trading 9 cents higher or 0.27% up at $33.58.

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