32 °C Singapore, SG
May 11, 2021
Latest News
US ethanol exports rebound on near-record shipments to China The Pacific calls Australia to Fund Our Future – NOT Gas. Limiting warming to 1.5C would ‘halve’ land-ice contribution to sea level rise by 2100 Ed’s note: Space, the final frontier Only intact forests can stave off climate change Tesla posts $438 million 1Q profit on strong electric vehicle sales Lithium Systems Acquires 123 Ton eDumper Project Toyota Tsusho to conduct biofuels trials in Singapore UN declares 2021 is ‘year for action’ on climate Loss of Arctic sea ice can spoil French wine harvest Southeast Asia to establish its own framework for green investments, but natural gas remains a feature Major Asian bank says it’s not practical in the short term to cut off clients in the coal business Volkswagen Reveals the ID.6 CROZZ and ID.6 X Guest post: How finance from rich nations could drive 40% of new coal plant emissions What’s Greener In Europe — A Train, A Plane, Or A Car? What’s Dirtiest? Polestar 0: A Truly Carbon-Neutral Car By 2030 University researchers raise a toast to biofuel prospects How can small renewable power producers help the Philippines reach its 35% clean energy target? New report hails the decade of renewables as 2020 hits capacity record Low Carbon Aluminum Boosted By Audi’s Use In Automotive First To avoid future pandemics, reverse the destruction of ecosystems Eni’s new treatment plant begins operations Smart energy managed service stations coming in Singapore Is 2021 when net zero targets become a central focus for world leaders? Australia ranked worst in world on Covid recovery spending on green options How wind power is leading America’s energy transition Indoor-Grown Weed Is Spewing Carbon Into the Atmosphere China selects Siemens Energy transformers for first 66kV offshore wind farm LG Energy Solution to invest $4.5bn in US battery production expansion Waning support for nuclear power 10 years after Fukushima

Major Asian bank says it’s not practical in the short term to cut off clients in the coal business

SINGAPORE — Singapore’s largest bank DBS Group Holdings said it’s not practical to cut off clients in the coal business in the short term.

DBS on Friday announced that it aims to eliminate thermal coal financing by 2039.

To get there, DBS will cease taking on new clients that derive more than 25% of their revenue from thermal coal with immediate effect. And from January 2026, the bank will stop financing clients with more than 50% of their revenue from thermal coal — except for their non-thermal coal or renewable energy activities.

Explaining the 50% threshold, DBS Chief Executive Piyush Gupta cited how it’s “impossible” to expect energy majors BP, Exxon Mobil and Shell to reduce their oil business significantly in the next five years.

Piyush Gupta, chief executive officer of DBS Group Holdings.

Bryan van der Beek | Bloomberg | Getty Images

“Similarly the whole bunch of conglomerates that we deal with, for whom coal is one part of their business but they’re increasingly trying to do other stuff, they’re trying to build a renewable business, they’re trying to get into other forms of activities,” he told CNBC’s “Squawk Box Asia” on Friday.

“For us to say that we won’t deal with any client if your coal is more than 50% of business becomes very hard and that’s just the practical reality. You do want to help them do the other things, you do want to help them build a wind plant, you do want help them continue and diversify their business, you want to help them in the transition,” said Gupta, who’s a member of CNBC’s ESG Council.

Avoiding ‘greenwashing’

Banks globally have come under pressure by shareholders and lobbyists to stop financing coal and play a larger role in promoting sustainability practices among their clients.

Gupta acknowledged that it’s “very hard” to make sure that businesses are not “greenwashing” — a term used to describe giving a misleading impression of green credentials.

Part of the problem is not having a clear framework to measure how companies are living up to their ESG — environmental, sustainability and governance — targets, said the CEO.

ESG is a set of criteria used to measure a company’s performance in areas ranging from carbon emissions to contributions to society and staff diversity.

“The reality is we rely on our clients in many cases to disclose what they’re doing. I can’t physically go to every mine they have around the world, to every plant they have around the world,” he said, adding that DBS also uses third-party consultants to audit and check on its clients.

As attention on ESG practices grows, disclosure standards will likely improve, said Gupta.

“So while there will be greenwashing at the margin, I think the degree of scrutiny is increasing and that will allow people to get more and more comfortable that what is being done is indeed the right stuff,” he said.

Source

Leave a Reply

Your email address will not be published. Required fields are marked *