The nine sectors represent the most carbon-intensive institutional banking segments financed by DBS. They represent 31% of the bank’s outstanding loans but constitute the vast majority of the Institutional Banking Group’s financed emissions.Amongst the seven decarbonisation targets set, six[2] of them are set as intensity metrics with the objective to achieve lower emissions per unit of output or activity. This reflects DBS’ goal of embarking on a net zero path that is consistent with inclusive and sustainable growth and prosperity.
Acknowledging that the path to net zero requires a lower usage of fossil fuels, an absolute emissions reduction target has been set for the O&G sector. By 2030, the bank has targeted to reduce the absolute emissions in the O&G sector which are attributable to DBS by 28%, fully aligned with the IEA NZE scenario. The bank’s O&G target will cover Scope 1, 2 and 3 emissions.
This complements the bank’s earlier commitment made in 2019 to progressively phase out thermal coal financing.
In addition, the decarbonisation targets go beyond the bank’s institutional banking lending book and will cover capital markets activities as well.
The targets will be reviewed periodically as science and client data evolve. DBS will also update on its progress annually through its Sustainability Report.Piyush Gupta, Chief Executive Officer, DBS Bank said, “Our firm conviction is that our net zero commitment, made last October, must be supported by a clear and detailed roadmap and plan. However, charting a viable course of action that is constructive and impactful is not easy, given challenges in mapping out suitable industry pathways and realistic medium-term milestones in markets with differing starting points. That is why I am pleased that we are able to announce today a set of ambitious, broad and measurable actions that we can execute against. The decarbonisation targets will act as the ‘north star’ for our financing activities guiding us to net zero by 2050 through measurable change.”
Supporting Asia’s transition to a low-carbon economy
DBS’ commitments are ambitious as there is widespread recognition that many emerging markets in which it operates will move to net zero at slower rates than their developed market counterparts. Despite this, the bank is committed to moving to net zero by 2050, setting the bank on a path that is proactive and anticipatory of its customers’ and society’s needs.With the announcement, the bank aims to encourage and enable its institutional banking customers to pivot their business strategies and accelerate their transition journeys. This could be achieved in various ways including by providing them with sustainable and transition finance solutions.
Tan Su Shan, Group Head, Institutional Banking Group said, “Our ability to achieve our net zero ambition relies heavily upon the success of our clients in delivering their own transition plans. In the past few years, we have seen a significant increase in the demand for green and sustainable finance solutions. To accelerate the transition and meet the vast investment needs in the next few decades, we will proactively partner our customers, providing them with financial advisory and transition finance solutions, as we collectively work towards a low-carbon future.”
Gupta added, “Decarbonisation cannot be achieved in silos – the global banking and business community, and world leaders have a part to play in balancing the climate agenda, social equity and economic development. Collectively, we must exercise leadership by working towards a balanced, sustainable and just transition.”DBS’ decarbonisation commitments can be found in its report at the following link: go.dbs.com/our-path-to-net-zero. The report was put together by DBS with support from Oliver Wyman.
DBS’ steady progress to tackle climate changeDBS has been proactively adopting measures to tackle climate change for several years. The bank has been making steady progress across several areas as part of its broader sustainability efforts.
DBS continued to build on its sustainable financing business, growing its sustainable finance portfolio to SGD52.7 billion as at 30 June 2022, exceeding its SGD50 billion target well ahead of 2024.
DBS is committed to achieving net zero operational carbon emissions across the bank by end-2022 and continues to reduce the bank’s carbon footprint while advancing its sustainable procurement agenda. As at end 2021, 100% of DBS’ new suppliers have signed their commitment to the bank’s Sustainability Sourcing Principles.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 is committed to using 100% renewable energy for its Singapore operations by 2030.
[1] The carbon emission pathway to the desired target set[2] 1) Power, 2) Automotive, 3) Aviation, 4) Shipping, 5) Steel, and 6) Real Estate
