DBS Bank has raised its sustainable finance target to SGD50 billion by 2024, accelerating its sustainability agenda in helping customers incorporate sustainable business practices into their overall business strategy.
The new commitment reinforces DBS’ efforts in responsible banking which is a key pillar of the Singaporean bank’s approach to sustainability. It also stems from more companies seeking to advance their corporate sustainability agenda through sustainable financing, especially as the Covid-19 pandemic puts sustainability in the spotlight.
Tan Su Shan, Group Head of Institutional Banking, DBS, said that this “never normal” world has become an opportunity for companies to see how they can tackle an expanding range of environmental, social and governance (ESG) challenges, as well as integrate the social and sustainability agenda into their corporate strategy and business practices.
“We thought our earlier target of SGD20 billion for renewable and other green financing would be a stretch and were greatly heartened at the level of customer interest in moving from business-as-usual mode to adopting sustainability in their strategies. Since Covid-19 hit, many companies have actually doubled down on their ESG commitments and we saw a marked increase in the number of corporate interest in sustainable financing,” Tan Su Shan, added.
DBS continues to see a good mix of sustainable financing deals across the markets it operates in, and across sectors. The green loan market continues to be dominated by borrowers in the real estate sector, but the bank is now involved in others such as financing renewable energy equipment makers and electric vehicle battery plants.
To encourage more companies from key industries to transition to a low-carbon economy, DBS is the first Singapore bank to offer transition financing to companies that want to take incremental steps towards reducing carbon footprint. It is the first commercial bank to publish a Sustainable and Transition Finance Framework and Taxonomy, which serves as a reference to guide clients to adapt and build resilience in the face of climate change, resource scarcity and address critical global issues such as income inequality.
Tan added that increasingly, stakeholders also want to understand and measure the value companies create beyond profits and ESG considerations are very much at the forefront now.
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