WWF reports that most Southeast Asian banks ignore climate change threats
Author: Tim Daubach, Eco-Business, Published on: 24 August 2019
"Climate change threats ignored by most Southeast Asian banks," 22 August 2019
Banks in the 10 countries comprising...Asean...are not responding fast enough to threats posed by climate catastrophe and environmental degradation, risking financial instability and social unrest in the region, a new assessment by non-governmental organisation (NGO) World Wildlife Fund (WWF) has found.
Of the 35 banks assessed, only four, all headquartered in Singapore or Thailand, met at least half of the criteria used in the study, which indicate whether banks heed environmental, social and governance (ESG) standards and thoroughly assess and mitigate social and environmental risks when deciding who to lend money to. More than 50 per cent of Southeast Asian banks fulfilled less than a quarter of the criteria, the report titled Sustainable Banking Assessment (SUSBA) reads.
On a more positive note, the study rates the three Singapore banks DBS, OCBC and UOB as top performers in the wake of shifts away from coal power lendingand no-deforestation commitments, and has found that 74 per cent of the banks have made improvements over the last 12 months.
But the failure by most banks to thoroughly incorporate responsible financing practices into their business models may undermine such progress and sustainable development in Southeast Asia...
...[O]nly 9 per cent of banks assessed have no-deforestation policies, despite Southeast Asia being home to some of the world’s deforestation hotspots, and a staggering 91 per cent continue to finance new coal-fired power plants even as Southeast Asian nations step up efforts to shift towards cleaner alternatives and renewable energy prices fall and technology improves.
...[O]nly 17 per cent of banks surveyed recognise water risk, the report says. Worse still, not a single bank in Asean requires clients to conduct water risk assessments.
Banking regulators and associations in Asean, meanwhile, seem to have woken up to the need to decrease capital invested in polluting and environmentally damaging activities, while raising allocations to investing with environmental benefits. In seven out of the 10 Asean countries, regulators and associations will have issued sustainable banking regulations or guidelines by the end of this year, according to WWF’s study.
The report's webpage is here.