SINGAPORE - OCBC Bank has joined a worldwide alliance of banks to strengthen and speed up the adoption of decarbonisation among these financial institutions.
It said in a statement on Tuesday that it has joined the Net Zero Banking Alliance, which was launched by the United Nations Environment Programme Finance Initiative in April 2021. It said that as part of the alliance, it commits to putting greenhouse gas emissions attributed to its lending and investment portfolios on a path to net zero by 2050 or sooner.
It will also set emissions targets for 2030 – or sooner – within 18 months of joining the alliance and a 2050 target, and targets every five years between 2030 and 2050, among other moves to enhance disclosure and use carbon offsets more effectively.
The alliance seeks to provide an internationally coherent framework for member banks to operate in and guidelines to they can follow while learning from each other, noted the bank. There are currently 119 member banks across 41 countries in the alliance, representing close to 40 per cent of global banking assets amounting to US$70 trillion (S$99.7 trillion).
OCBC Bank is the second Singapore bank to join the alliance, after DBS in October 2021. “For our part, joining the alliance reflects our commitment as a group to achieving net zero, not just in our operations, but also in our lending and investments businesses,” said OCBC Bank group chief executive Helen Wong in the statement.
However, Singapore businesses expressed concerns about implementing more sustainable business models in two separate surveys, whose results were released in the last two days. A survey of 800 small and medium-sized enterprises (SMEs) by DBS Bank and Bloomberg Media Studios across six countries in Asia in August found that the top three challenges businesses cite in their transition plans are the lack of standardised measurement in reporting standards, lack of technical know-how in the market to implement sustainability (ESG) frameworks and solutions, and the lack of funding, said DBS in a statement on Tuesday.
Meanwhile, the Singapore Chinese Chamber of Commerce and Industry also found in its annual business survey high costs and business survival among reasons that hinder SMEs’ sustainability transition.
On challenges OCBC might face to meet its commitments, Mr Mike Ng, the head of OCBC’s sustainability office for global wholesale banking, said: “One of the challenges that we have anticipated is in the ability to obtain sustainability-related data in a systematic and reliable manner, especially across different markets at varying levels of maturity in sustainability.” But there is reason to be optimistic, he added: “There have been concerted efforts across different business sectors to develop innovative technology solutions that allow companies to capture such data, including their operational emissions.”
