DBS Bank commits to zero thermal coal exposure by 2039
Singapore.16 Apr 2021
First Singapore bank to commit to phase out thermal coal
Furthers efforts to support corporates transitioning towards a low-carbon future
Singapore, 16 Apr 2021 - As part of continued efforts to tackle climate change and work towards a lower carbon future, DBS is the first Singapore bank to commit to zero thermal coal exposure[1]by 2039.
To achieve its latest goal of zero thermal coal exposure, the bank will:
Tan Su Shan, Group Head of Institutional Banking, DBS Bank said, “Every year counts in the journey towards a low-carbon future and we recognise the increasing need for transition financing to help industries gradually navigate away from brown to green. In turn, renewable energy will increasingly take centre stage as a core component in the world’s transition towards net-zero. To spur the development of renewables, we have upped the ante on financing projects by leading energy players in the region with the aim to scale the reach and supply of renewable energy in the near future. I believe that our commitments will result in substantial impact in the years to come.”
DBS has progressively refined its coal commitments to tackle climate change over the last few years. In February 2018, the bank issued a statement to restrict financing to only coal-fired power projects which adopt more advanced technologies which emit lower carbon emissions and to stop financing new thermal coal mining projects. This was followed by a blanket cease in financing any new coal power assets in April 2019.
At the same time, the bank continues to ramp up support towards the renewables sector as evidenced by its increased exposure to renewable energy projects of SGD 4.2 billion in 2020 versus SGD 2.85 billion in 2019.
Building on ongoing sustainability efforts
Over the past few years, DBS has been steadily making traction across several focus areas as part of the bank’s broader sustainability efforts.
DBS is also among global companies that committed to the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), on voluntary disclosures around climate-related risks and opportunities. The Task Force’s recommendations will help secure more complete, meaningful, reliable and consistent data across all companies and sectors for climate-related financial disclosures. This provides stakeholders with more meaningful and transparent climate-related financial information, enabling market forces to drive efficient allocation of capital and support a smooth transition to a low-carbon economy.
[1] Encompassing loans to mining and power generation companies
[2] The SSP outlines DBS’ expectations of its suppliers across these key areas: (1) human rights, (2) health and safety, (3) environmental sustainability, as well as (4) business integrity and ethics. All suppliers are reviewed against the SSP during registration and at regular intervals as part of the bank’s ongoing supplier management process.
About DBS
DBS is a leading financial services group in Asia with a presence in 18 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's "AA-" and "Aa1" credit ratings are among the highest in the world.
Recognised for its global leadership, DBS has been named “World’s Best Bank” by Euromoney, “Global Bank of the Year” by The Banker and “Best Bank in the World” by Global Finance. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney. In addition, DBS has been accorded the “Safest Bank in Asia” award by Global Finance for 12 consecutive years from 2009 to 2020.
DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets. DBS is committed to building lasting relationships with customers, and positively impacting communities through supporting social enterprises, as it banks the Asian way. It has also established a SGD 50 million foundation to strengthen its corporate social responsibility efforts in Singapore and across Asia.
With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. For more information, please visitwww.dbs.com.
To achieve its latest goal of zero thermal coal exposure, the bank will:
1) Cease the onboarding of new customers who derive more than 25% of their revenue from thermal coal with immediate effect, and lower the threshold as time progresses;
2) Stop financing customers who derive more than 50% of revenue from thermal coal from January 2026, except for their non-thermal coal or renewable energy activities, and lower the threshold as time progresses;
3) Leverage DBS' Sustainable and Transition Finance Framework to achieve meaningful decarbonisation in sectors which remain reliant on thermal coal. This will be conducted through engagements with customers to establish their transition strategies, and the incorporation of greenhouse gas reduction targets in all applicable sustainability linked loan structures; and
4) Disclose DBS’ thermal coal exposure annually in its Sustainability Report to provide transparency on progress made.
Tan Su Shan, Group Head of Institutional Banking, DBS Bank said, “Every year counts in the journey towards a low-carbon future and we recognise the increasing need for transition financing to help industries gradually navigate away from brown to green. In turn, renewable energy will increasingly take centre stage as a core component in the world’s transition towards net-zero. To spur the development of renewables, we have upped the ante on financing projects by leading energy players in the region with the aim to scale the reach and supply of renewable energy in the near future. I believe that our commitments will result in substantial impact in the years to come.”
DBS has progressively refined its coal commitments to tackle climate change over the last few years. In February 2018, the bank issued a statement to restrict financing to only coal-fired power projects which adopt more advanced technologies which emit lower carbon emissions and to stop financing new thermal coal mining projects. This was followed by a blanket cease in financing any new coal power assets in April 2019.
At the same time, the bank continues to ramp up support towards the renewables sector as evidenced by its increased exposure to renewable energy projects of SGD 4.2 billion in 2020 versus SGD 2.85 billion in 2019.
Building on ongoing sustainability efforts
Over the past few years, DBS has been steadily making traction across several focus areas as part of the bank’s broader sustainability efforts.
1) Managing own environmental footprint
DBS recently committed to ensure net zero operational carbon emissions across the bank by 2022 and continues to reduce the bank’s carbon footprint while advancing its sustainable procurement agenda. As at end 2020, 99.9% of DBS’ new suppliers have signed their commitment to the bank’s Sustainability Sourcing Principles (SSP)[2]and no suppliers were identified to have caused significant negative environmental or social impact in their operations or supply chains.
In November 2017, DBS became a signatory to RE100 – the first Asian bank and Singapore company to join the global renewable energy initiative. The bank committed to using 100% renewable energy for its Singapore operations by 2030. In 2020, DBS increased its operational energy consumption from renewables across its key markets to 21% of the bank’s total energy consumption, up from 14% in the previous year.
2) Promoting sustainable finance
In January 2021, DBS raised its sustainable finance target to SGD50 billion by 2024, accelerating its sustainability agenda in helping customers incorporate sustainable business practices into their overall business strategy. This reinforces DBS’ efforts in responsible banking which is a key pillar of the bank’s approach to sustainability.
Since 2018, DBS has concluded over 100 sustainable financing deals worth about SGD 17 billion. For full year 2020, the bank ranked first in Bloomberg’s Global and APAC League Tables for ‘Green Loan Principles Loans’, and APAC (ex Japan) League Table for ‘Green Use of Proceeds Loans’ for its role as Mandated Lead Arranger.
3) Committing to transparent disclosures
In 2019, DBS became the first bank in Singapore and South East Asia to adopt the Equator Principles.
The Equator Principles (EPs) is a globally recognised risk management framework adopted by financial institutions for determining, assessing and managing environment and social risk in development projects. The EPs also outline environmental and social standards for large scale developments and is based on the International Finance Corporation (IFC) Performance Standards published by the World Bank Group. DBS’ adoption of the EPs would mean that the bank will go the extra mile in disclosing information related to large-scale developments that it is involved in. Currently, the bank already adheres to due diligence processes in accordance to IFC’s Performance Standards when assessing large project financing deals.
DBS is also among global companies that committed to the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), on voluntary disclosures around climate-related risks and opportunities. The Task Force’s recommendations will help secure more complete, meaningful, reliable and consistent data across all companies and sectors for climate-related financial disclosures. This provides stakeholders with more meaningful and transparent climate-related financial information, enabling market forces to drive efficient allocation of capital and support a smooth transition to a low-carbon economy.
[1] Encompassing loans to mining and power generation companies
[2] The SSP outlines DBS’ expectations of its suppliers across these key areas: (1) human rights, (2) health and safety, (3) environmental sustainability, as well as (4) business integrity and ethics. All suppliers are reviewed against the SSP during registration and at regular intervals as part of the bank’s ongoing supplier management process.
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About DBS
DBS is a leading financial services group in Asia with a presence in 18 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's "AA-" and "Aa1" credit ratings are among the highest in the world.
Recognised for its global leadership, DBS has been named “World’s Best Bank” by Euromoney, “Global Bank of the Year” by The Banker and “Best Bank in the World” by Global Finance. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney. In addition, DBS has been accorded the “Safest Bank in Asia” award by Global Finance for 12 consecutive years from 2009 to 2020.
DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets. DBS is committed to building lasting relationships with customers, and positively impacting communities through supporting social enterprises, as it banks the Asian way. It has also established a SGD 50 million foundation to strengthen its corporate social responsibility efforts in Singapore and across Asia.
With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. For more information, please visitwww.dbs.com.
