Chief Sustainability Officer DBS Bank Reveals 5 Trends Shaping the Direction of Sustainable Financing Today | Bahasa

From Transition Finance to Nature-Based Solutions, the Financial Sector Has a Strategic Role in Accelerating the Low-Carbon Economic Transformation

Transition finance refers to funding that helps companies and economies move gradually toward lower emissions and more sustainable operations, even if they are not yet fully “green.” Rather than focusing solely on projects that are already environmentally friendly, it supports efforts such as technological upgrades, energy efficiency, and operational emissions reduction.

In the past two years, the term has gained major traction in the global financial world as investors and policymakers recognize that decarbonization must include “hard-to-abate” sectors. For developing countries such as Indonesia, this approach is considered most relevant. The economy is still heavily dependent on fossil fuels, while the need for socio-economic growth remains high. Transition finance bridges the gap between today's development needs and commitments to a low-carbon future, while creating space for greater innovation and financial inclusion.

Redefining Finance Through Innovation to Drive Climate Transformation

The path to net zero demands not only new technologies, but also new ways of thinking about finance. Traditional funding models often fall short in meeting the massive funding needs for decarbonization and adaptation. This is where financial innovation becomes crucial to create mechanisms that link climate performance with financial value. One notable innovation is the carbon credit system, which allows the market to put a price on emission reductions, rewarding measurable progress and channeling capital toward real-world transformation.

Despite their potential, carbon markets have long been under-utilized as a mechanism to channel capital toward projects that deliver measurable climate impact. To strengthen this ecosystem, DBS Bank co-founded a global carbon exchange Climate Impact X (CIX) alongside Temasek, the Singapore Exchange, and Standard Chartered. CIX aims to build a trusted and transparent marketplace for high-quality carbon credits, enabling capital to flow more efficiently toward projects that deliver measurable environmental and social impact. By setting higher standards of integrity and verification, CIX is helping unlock the full potential of carbon markets as a catalyst for climate action.

Building on this momentum, the market is now seeing the rise of transition credits, a new form of financial innovation that recognizes credible, measurable efforts from companies still on their decarbonization journey. While not yet fully green, these players are taking real, quantifiable steps toward sustainability. Helge refers to this mechanism as a form of “realistic financing,” as it acknowledges the fact that transition cannot happen overnight.

Sustainability Is Simply Good Business

One of the most important shifts in the world of sustainable finance is the growing belief that sustainability has evolved beyond a moral imperative to becoming a core driver of long-term business success. Helge asserts that companies that embed climate and social considerations into their strategy are not just doing what’s right; they are building stronger, more adaptive organizations amid global volatility.

Data from the Corporate Governance Institute shows that companies that integrate Environmental, Social, and Governance (ESG) principles into their business models tend to have lower operational risks, stronger customer loyalty, and higher investment appeal. With the growing green investment market, sustainability is now not just a matter of ethics, but a competitive advantage that determines the future resilience of businesses.

“There isn't always a trade-off between returns and sustainability. If we believe in megatrends such as climate change, then incorporating sustainability into the core of our business will actually make it more resilient in the long term,” Helge added.

Protecting Nature Means Protecting the Economy

A report by PwC’s global Centre for Nature Positive Business shows that over $58 trillion or 55 percent of the global GDP is highly or moderately dependent on nature. However, World Benchmarking Alliance found that only less than 1 percent of companies worldwide realize how much their operations depend on nature. Therefore, protecting nature is not just an environmental imperative, but an economic one.

Helge believes Indonesia has enormous NBS potential. Home to around 20 percent of the world’s mangroves and some of the richest biodiversity on earth, the country holds immense potential to turn natural assets into engines of sustainable growth. This is where Nature-Based Solutions (NBS) come in, such as funding for mangrove restoration, peatland rehabilitation, and nature-based carbon projects. Economically, these projects have proven to have a strong multiplier effect. Mangrove restoration, for example, not only reduces emissions by up to four times more per hectare than terrestrial forests, but also protects coastal areas from economic losses due to natural disasters, which can amount to billions of dollars annually.

Cross-sector collaboration is key to accelerating the green transition

The transition to a green and blue economy cannot be achieved by one party alone. Helge emphasized the importance of cross-sector collaboration between governments, regulators, industry players, financial institutions, and civil society to deliver more innovative, measurable, and sustainable solutions. This whole-of-economy approach makes it possible to share risks and accelerate financing for transition projects that were previously difficult to access through conventional markets.

DBS Bank Ltd (Bank DBS) is one of the institutions actively implementing this approach through a number of initiatives with both global and local partners. One example is the blended finance scheme carried out in collaboration with Karian Water Services, the Asian Development Bank, and the International Finance Corporation to fund the provision of clean water for more than two million residents in Jakarta, Tangerang, and South Tangerang. This project marks the first implementation of blended finance in Indonesia’s water sector and demonstrates how such partnership models can be expanded to other areas from renewable energy to sustainable infrastructure to accelerate the transition toward a low-carbon economy.

“We cannot achieve this change alone. In line with our aspiration to be the Best Bank for a Better World, DBS Bank is committed not only to developing nature-based financing solutions but also to driving impactful financial innovation through collaboration with various partners. Every stakeholder has a role to play so that the green and blue economic transformation becomes more than just a concept. It results in solutions that are relevant, inclusive, and sustainable for both people and the environment,” said Helge.

These initiatives illustrate a new direction for the financial world, where collaboration, innovation, and the courage to take risks become the key to accelerating the transition toward a green and blue economy. With climate challenges becoming increasingly evident, the financial sector is in a strategic position not only to channel financing but also to reshape the value paradigm: from merely pursuing profit to creating long-term impact for people and the planet.

As part of its commitment to a sustainable business transition, DBS Group has taken a proactive step through the decarbonization guide “Our Path to Net Zero”, which highlights nine key sectors, ranging from aviation, automotive, property, chemicals, food and agriculture, oil and gas, energy, steel, to shipping. This guide serves as a strategic reference for DBS Bank to design transition plans that are realistic while significantly contributing to emission reduction.

In line with this, Bank DBS has also established the Indonesia Sustainability Council (ISC), a council responsible for guiding DBS Bank Indonesia’s ESG-related strategies and actions. The ISC works in alignment with DBS Group’s global sustainability efforts, including the Group Sustainability Council and similar councils across five key markets outside Singapore.

In Indonesia itself, Bank DBS Indonesia plays a strategic role in supporting companies that are transforming toward a low-carbon economy. One example is its role as the ESG coordinator in the issuance of social bonds by PT Bank Rakyat Indonesia (Persero) Tbk (BRI), which serves as a concrete example of how the financial sector can promote more responsible business practices while expanding access to green financing.

For more information on DBS Bank’s sustainability efforts, please visit this page.

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About DBS

DBS is a leading financial services group in Asia with a presence in 19 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 Global Finance, “World’s Best Bank” by Euromoney and “Global Bank of the Year” by The Banker. 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 and the world’s “Most Innovative in Digital Banking” by The Banker. In addition, DBS has been accorded the “Safest Bank in Asia” award by Global Finance for 17 consecutive years from 2009 to 2025.

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.

Established in 1989 as part of the Singapore-based DBS Group, PT Bank DBS Indonesia (Bank DBS Indonesia) is one of the banks with the longest history in Asia. Currently operating 1 Head Office, 13 Branch Offices, 16 Assistant Offices, 1 Functional Office and 3,011 active employees in 15 Major Cities in Indonesia, Bank DBS Indonesia provides comprehensive banking services that focus on the customer experience to 'Live more, Bank less'. We also see a purpose beyond banking and are committed to supporting our customers, employees, and the community towards a sustainable future. 

PT Bank DBS Indonesia is licensed and supervised by The Indonesian Financial Services Authority (OJK), and an insured member of Indonesia Deposit Insurance Corporation (LPS).

DBS is committed to building lasting relationships with customers, as it banks the Asian way. Through the DBS Foundation, the bank creates impact beyond banking by uplifting lives and livelihoods of those in need. It provides essential needs to the underprivileged, and fosters inclusion by equipping the underserved with financial and digital literacy skills. It also nurtures innovative social enterprises that create positive impact.

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 visit www.dbs.com.