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OCBC Bank joins Net-Zero Banking Alliance

OCBC Bank joins Net-Zero Banking Alliance

  • 25 Oct 2022

OCBC Bank today announced that it has become a signatory to the United Nations-convened, industry-led Net Zero Banking Alliance. This move is part of the Bank’s commitment to working with industry peers, customers and policymakers to transition to a low-carbon world.

The Net Zero Banking Alliance was launched by the United Nations Environment Programme Finance Initiative (UNEPFI) in April 2021. The Alliance reinforces, accelerates and supports the implementation of decarbonisation strategies, providing an internationally coherent framework and guidelines in which to operate, supported by peer-learning from member banks. There are currently 119 member banks across 41 countries, representing close to 40% of global banking assets amounting to US$70 trillion.

“We’re pleased to welcome OCBC Bank as the newest signatory to the Net-Zero Banking Alliance,” said Eri Usher, head of UNEPFI, “and we look forward to their contributions to the global banking community’s collective transition to net-zero.”

Said Ms Helen Wong, Group CEO of OCBC Bank, “We are already working to support a transition to net zero carbon emissions for our customers in key sectors. Such a transition is a mammoth task; customers, industry peers and policymakers must all collaborate if a sustainable low-carbon world is to be realised at speed: It must be ‘all hands-on deck’.

“For our part, joining the Alliance reflects our commitment as a Group to achieving net zero not just in our operations but also in our lending and investments businesses. We want to help bring about progress that is measurable and broad-based; it should gain momentum over time and be irreversible.”

As a signatory of the Alliance, OCBC Bank commits to:

  • Transition the operational and attributable GHG emissions from its lending and investment portfolios to align with pathways to net-zero by 2050 or sooner;
  • Within 18 months of joining, set 2030 targets (or sooner) and a 2050 target, with intermediary targets to be set every 5 years from 2030 onwards;
  • Annually publish absolute emissions and emissions intensity in line with best practice and, within a year of setting targets, disclose progress against a board-level reviewed transition strategy setting out proposed actions and climate-related sectoral policies; and
  • Take a robust approach to the role of offsets in transition plans.

In 2019, OCBC Bank became the first Southeast Asian bank to stop financing new coal-fired plants. On the business front, OCBC Bank was also the first to announce a target for its sustainable finance portfolio in 2019 to achieve S$10 billion by 2022.

The Bank’s regional data centre – which contributes 40 per cent of the bank’s carbon emissions in Singapore – will implement a rack-based cooling system by the end of this year. This will see the facility’s emissions reduced by over 400 tonnes annually, equivalent to removing close to 400 cars from the roads. Rack-based cooling is one of the latest energy-efficient cooling methods for data centres as it allows for targeted chilling with the cooling units installed in closer proximity to the servers. The purpose-built data centre was accorded the BCA-IMDA (Building and Construction Authority – Infocomm Media Development Authority) Green Mark Platinum Award in 2017.

Signing up to the Alliance reinforces the Bank’s commitment towards achieving net zero in its goal to build a sustainable future.

OCBC Bank has stepped up to do more in recent years, having pledged to grow its sustainable finance portfolio to S$50 billion by 2025 – after achieving its previous goals – of S$25 billion by 2025 and S$10 billion by 2022 – ahead of time. The Bank has funded projects in the region that harness the wind and capture the sun’s rays to generate clean energy. These projects range from wind and solar farms to electric cars, hybrid buses and solar panel installations.

On the consumer front, the Bank has launched OCBC Eco-Care Loans, including home, renovation and car loans, which incentivise individuals to own electric vehicles and to build more environmentally sustainable homes.

Earlier this year, OCBC Bank committed more than S$25 million in decarbonisation efforts in Singapore, Malaysia and Greater China. The investments will be used to deploy energy-efficient technology to reduce its carbon emissions, and solar energy systems that will increase renewables in its energy mix for powering operations. The investments will yield a carbon emission reduction of approximately 10,000 tonnes within the next four years. This is equivalent to removing close to 10,000 cars from the road.

In December 2020, the Bank adopted the Equator Principles, an internationally recognised risk management framework adopted by financial institutions worldwide which will guide how the Bank determines, assesses and manages environmental and social risks in projects. OCBC Bank’s voluntary adoption of the Equator Principles is an extension of the Responsible Financing framework which the Bank put in place in 2017.

Under the #OCBCCares programme, the Bank has also supported the OCBC Arboretum, a landmark project at the Singapore Botanic Gardens which conserves and studies 200 species of dipterocarp trees. The 2,000 trees at the Arboretum can store 80 million kg of CO2 over their lifetimes. Research at the Arboretum can also improve future forestation and carbon storage projects.

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