DBS Bank sets low-carbon industry targets
Singapore's DBS Bank on Tuesday announced sectoral targets aligned with decarbonization guidelines, to support Asia's transition to a low-carbon economy.
As part of the bank's commitment to being net-zero in its financed emissions by 2050, it represents one of the most comprehensive sets of decarbonization targets in the global banking industry.
Decarbonization targets have been set for seven sectors, namely, power, oil and gas, automotive, aviation, shipping, steel, and real estate, while data coverage targets were set for the food and agribusiness sector as well as chemicals, paving the way for future sectoral decarbonization targets.
The nine sectors represent the most carbon-intensive institutional banking segments financed by DBS. They represent 31 percent of the bank's outstanding loans but constitute the vast majority of the Institutional Banking Group's financed emissions.
For instance, acknowledging that the path to net zero requires a lower usage of fossil fuels, an absolute emissions reduction target has been set for the oil and gas sector.
By 2030, the bank has targeted to reduce the absolute emissions in the oil and gas sector, which are attributable to DBS by 28 percent, fully aligned with the International Energy Agency's Net Zero Emissions by 2050 Scenario (IEA NZE).
This complements the bank's earlier commitment made in 2019 to progressively phase out thermal coal financing.
"In the past few years, we have seen a significant increase in the demand for green and sustainable finance solutions," said Tan Su Shan, group head of the Institutional Banking Group. "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."
The publication of this plan follows the bank's announcement in October 2021 that it had become a signatory of the Net-Zero Banking Alliance, the first Singapore bank to do so.
As a signatory, DBS is required to align its lending and investment portfolios with net-zero emissions by 2050.