Singapore, 15 December 2021 – OCBC Bank announced today that it has joined leading global banks to become the first in Southeast Asia to adopt the Poseidon Principles. The Poseidon Principles are a globally recognised framework that guides how the Bank determines, assesses and manages the climate alignment of its ship finance portfolio to support the shipping industry’s targets of reducing carbon emissions by at least 50% by 2050.

The Poseidon Principles, launched in June 2019, provide a common, global baseline for financial institutions to quantitatively measure the carbon footprint of their shipping customers and disclose whether their lending portfolios are tracking the adopted climate goals by the International Maritime Organisation (IMO). According to IMO, maritime transport emits around 940 million tonnes of carbon annually and is responsible for about 2.5% of global greenhouse gases.

Currently, 29 financial institutions including OCBC Bank have committed to the Poseidon Principles to track, monitor and drive emissions reduction in their shipping portfolios. Together, they have a bank loan portfolio to global shipping of approximately US$189 billion – nearly 50% of the global ship finance. As at end-September 2021, the ship finance portfolio contributes to about 2% of OCBC Bank’s total loans book.

OCBC Bank’s voluntary adoption of the Poseidon Principles is an extension of the Responsible Financing framework which the Bank has put in place since 2017, which spells out policies and practices to ensure that the Bank’s financial services do not adversely impact people, communities or the environment.

Ms Elaine Lam, Head of Global Corporate Banking, OCBC Bank, said: “After publishing our first Task-Force on Climate-related Financial Disclosures report in 2020, we have moved to taking concrete actions to cut our financed emissions. A core part of the action steps involves us delving deeper into individual sectors to better measure and assess the impact of our sector-specific financing transactions. We will start with our ship finance portfolio, which makes up about 2% of our total loans book. The Poseidon Principles enable us to support our customers and stakeholders across the maritime eco-system more effectively on their decarbonisation journey. Being the first bank in Southeast Asia to adopt the Poseidon Principles lends great responsibilities on us. This is only the start of our transition to a low-carbon world.”

 Key milestones in OCBC’s sustainability journey

 OCBC Bank actively champions environmental sustainability in the different communities it serves.

 In 2019, OCBC Bank was the first bank in Southeast Asia to announce that it will no longer finance new coal-fired power plants globally. It subsequently adopted the Equator Principles in 2020. An internationally-recognised risk management framework, the Equator Principles serves as a guide how the Bank determines, assesses and manages environmental and social risks in projects.

To grow its sustainable finance portfolio, OCBC Bank has ramped up support for renewable energy projects and works closely with its customers on sustainability-linked loans and green loans. In addition to lending, the Bank assists its customers’ fund-raising efforts through green bonds.

By the end of September 2021, the Bank had achieved about S$30 billion of sustainable finance commitments, surpassing the ‘S$25 billion by 2025’ target that was set in 2020.