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Study finds Asian banks “falling short” in decarbonisation efforts

Study finds Asian banks “falling short” in decarbonisation efforts

According to a Wednesday study, banks in Asia are “falling behind” when it comes meeting global climate change pledges and aligning with their country’s decarbonisation goals.

Nearly 200 countries signed the Glasgow pact last year, calling on financial institutions and banks around the world to mobilize more finance to support global climate goals. According to Asia Research & Engagement, a Singapore-based environment group, a review of 32 banks in East and Southeast Asia revealed that none of them had made clear commitments or developed adequate implementation plans to meet Paris climate goals.

ARE stated that “Asia’s banks are failing to align with national decarbonisation strategies and are not yet taking steps necessary for meeting global climate goals.” It said that while banks were quick to launch green financial products, they have lacked the necessary infrastructure to clean up existing products and implement policies to divert capital from carbon-intensive industries.

The report stated that “This raises concerns about greenwashing: that banks seek a marketing advantage for sustainable finance deals while providing greater levels of finance to dirty industry.” Only nine of the 32 major banks in countries like China, Japan and South Korea had long-term net zero commitments for emissions. While 13 had policies that prohibited the financing new coal-fired power, the report said.

DBS Group in Singapore was the top-ranked Asian bank. Although it has a long term net-zero target, it has not yet made any specific short- and mid-term plans. It also has a lot of gaps in its financial policies. DBS spokesmen said that the bank was the first to sign up for the Net-Zero Banking Alliance. This alliance commits the bank to becoming net-zero by 2050. He stated that the bank’s plans for achieving the goal were detailed in the bank’s sustainability report, which was published this month.

Five banks were given the lowest rating, as they had “barely begun” their journey towards climate ready, including China’s Bank of Ningbo (China), Ping An Bank (China) and Shanghai Pudong Development Banks (SPDB). SPDB stated in an email that it will “fully service” all elements of the carbon neutral industrial chain and support industries, and that green development was part its “corporate DNA”.

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Ping An and the Bank of Ningbo declined comment. ARE said banks must establish clear climate policies aligned with national goals to avoid regulatory risks in the future and ensure clients’ transition to cleaner, more competitive technologies.

(This story is not edited by Devdiscourse staff.

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