DBS Group Holdings’ shareholders asked a couple of interesting questions during the banking group’s AGM on Mar 30. Of course there were the usual questions around liquidity, profitability, growth, credit costs, Lakshmi Vilas Bank and so on.
DBS is committed to sustainability. On Feb 4 this year, DBS announced it is committed to raising $50 billion in sustainable finance by 2024. And DBS is helping its customers in incorporating sustainable business practices.
Yet, on Dec 10, 2020, DBS announced the setting up of a digital exchange, “ enabling Institutional Investors and Accredited Investors to tap into a fully integrated tokenisation, trading and custody ecosystem for digital assets”.
So is there a conflict of interest between these two goals -sustainability and its tokenisation and digital exchange initiatives- for DBS?
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According to the University of Cambridge’s bitcoin electricity consumption index, bitcoin miners are expected to consume roughly 130 Terawatt-hours of energy (TWh), which is roughly 0.6% of global electricity consumption. This puts the bitcoin economy on par with the carbon dioxide emissions of a small, developing nation like Sri Lanka or Jordan, tech publications indicate. On the other hand, Coinshares has estimated that 73% of bitcoin miners use at least some renewable energy as part of their power supply, including hydropower from China’s dams.
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“Almost anything we do creates a conflict of interest because every activity of mankind emits carbon. The only way to go to a world with no carbon emission is to go back to 10,000 BC,” acknowledges DBS group CEO Piyush Gupta during the AGM. “Whether you’re in shipping, aviation or property or building and construction or textiles or clothes or technology, there is some degree of carbon emission. Even if you go into electric vehicles or solar panels, there is some carbon emission somewhere in the supply chain,” mulls Gupta.
As he sees it, incremental efficiencies are likely to be had in new forms of digital ledger, such as hashgraph crypto technology. Hashgraph is a form of distributed ledger that uses an acrylic graph to validate transactions, and does not use miners.
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“I think you will start to see incremental efficiency. The new forms of digital ledger [such as] hashgraph technology have far lighter energy consumption than bitcoin. You learn as you go along. Over time the energy consumption will also reduce, and will allow you to build a decent business without compromising on sustainability agenda,” Gupta hopes.
Another question on succession planning was answered by DBS chairman Peter Seah. “The answer is succession planning started the day Piyush joined the bank. There are no plans for [Piyush] to retire or for the board to retire him,” Seah says. “At the next AGM he will still be around.”
