(13 January 2023 – Singapore) A widening gap is forming between Asia’s major bank environmental, social and governance (ESG) leaders and laggards as regulators in the region ramp up scrutiny of sustainable finance, according to WWF.
Despite leading banks in Singapore and Malaysia making headway on implementing their environmental and social risk policies, WWF noted that over half of those who committed to net zero virtually remained stagnant in 2022, making little or no progress since a year prior.
Science-based decarbonisation targets still present a main gap for energy sector portfolios, with only 11 percent of banks setting targets.
The report also found 39 percent of the banks had committed to net zero financed emissions by 2050, up from 15 percent in 2021. Most banks in Singapore, Japan and South Korea, including DBS and MUFJ Financial Group, have set net zero targets. Few enterprises in Indonesia, Vietnam and the Philippines have done so.
“Only 40 percent of the criteria is met by Singaporean banks for setting client expectations on nature-related risk while other assessed countries meet only 20 percent of the criteria or lower,” said WWF Singapore’s Head of Sustainable Finance, Kristina Anguelova.