DBS steps up its sustainability commitments even as large US banks retreat
Sign up now: Get ST's newsletters delivered to your inbox
The bank’s sustainable financing commitments rose 27 per cent to $89 billion as at end-2024 from $70 billion in 2023.
ST PHOTO: SHINTARO TAY
Follow topic:
SINGAPORE – DBS Bank has been stepping up its commitments to sustainability and climate undertakings despite large US banks backing away from such initiatives.
The bank’s sustainable financing commitments rose 27 per cent to $89 billion as at end-2024 from $70 billion in 2023.
The increase underlines the rising demand for sustainable financing from across the region, as companies try to adopt greener ways of doing business, DBS said in its 2024 sustainability report released on March 6.
At the same time, the bank also issued close to $38 billion in sustainable bonds – well up on the $18 billion issued in 2023.
Ms Shilpa Gulrajani, DBS’ head of sustainable finance, said: “Amid a growing urgency for climate action, the need for climate adaptation and mitigation continues to accelerate.”
She told a briefing ahead of the report’s publication that Asian businesses face heightened pressure to migrate to low-carbon business models, yet many “lack the necessary resources to implement meaningful change”.
“Recognising this, DBS is deepening its commitment to transition finance, helping companies – particularly those in hard-to-abate sectors – access the capital and expertise required to transform their businesses,” added Ms Gulrajani.
The DBS report said that it had also cut its thermal-coal exposure to $1.3 billion in 2024. Cumulatively, this reduction is more than half of the $2.7 billion the bank held in 2021.
Meanwhile, it has also introduced an enhanced transition finance framework that should help speed up decarbonisation across Asia.
Unlike green finance, which is used exclusively to finance eligible green projects such as developing renewable energy sources, transition finance covers a broader range of industries that have yet to fall into the “green” category, but are still working on their sustainability goals.
Ms Gulrajani said that this framework was revised to align the bank’s definitions and guidelines with the latest internationally-recognised best practices.
Ms Shilpa Gulrajani, DBS’ head of sustainable finance, says Asian businesses face pressure to migrate to low-carbon business models.
PHOTO: DBS BANK
The bank has also continued to implement responsible business practices.
More than 22,000 employees are equipped with fundamental knowledge about sustainability, including climate-related topics, according to the report.
Separately, the lender has committed more than $100 million to support the wider community, the report said.
This includes $98.1 million in funding earmarked for multi-year programmes that focus on the provision of essential needs and fostering inclusion, while $4.5 million was set aside for commercial businesses that provide innovative solutions to create positive social or environmental change.
Large US banks have backtracked on their commitment to sustainability and climate action in the wake of US President Donald Trump’s re-election in November 2024.
The exodus from the Net Zero Banking Alliance
Their withdrawal appears driven by factors such as political pressure from the Trump administration, legal concerns, including investigations into potential antitrust violations, shifting market dynamics and the opportunity cost of not investing in or lending to fossil-fuel companies.
DBS chief sustainability officer Helge Muenkel said: “Notwithstanding these recent setbacks, DBS remains firmly committed to climate action and sustainable financing.”
He added: “We are also pushing hard into transition financing because this is what it takes to help businesses decarbonise.”
