Singapore’s Big Three Among Few to Pass Bank ESG Test

Singapore’s Big Three Among Few to Pass Bank ESG Test

Singapore’s «big three» banks – DBS, OCBC and UOB – were among the few that met half of WWF’s criteria on ESG criteria, in a study where nearly 90 percent of ASEAN lenders failed to do the same.

The World Wildlife Fund’s (WWF) study on bank’s ESG integration performance praised the three Singaporean lenders for their prohibition of financing new coal-fired power plants and implementing «no-deforestation» commitments, in contrast with 91 percent of their peers which remained highly dependent on fossil fuels. 

Of the 35 banks in the Sustainable Banking Assessment (Susba) report, the big three are joined by Thailand’s Kasikornbank as the only lenders to meet at least half of the WWF’s ESG 70-criteria framework. 

ESG = Profits?

WWF stresses the potential for financial instability and social unrest should ESG-related threats be left unaddressed, highlighting that just 9 percent of the banks had a strategy to manage or assess climate-related risks.

But in addition to avoiding such dire, macro outcomes, WWF notes that there are significant and growing profits at risk for lenders that fail to evolve. 51 percent of banks assessed offer green financial products but are mostly focused on renewable energy and with a huge financing gap to fill in other sectors like infrastructure, energy efficiency, food, agriculture and land use.   

According to the study, 89 percent of the ASEAN banks failed to meet half of WWF’s ESG criteria and 51 percent met less than a quarter. However, 74 percent made improvements compared to last year’s Susba study.