January 6, 2021 Read More →

Coal, deforestation pose risks for Southeast Asian banks

Eco-Business: 

Two-thirds of Southeast Asian banks do not recognise deforestation and biodiversity risks although more than half of the world’s GDP—$44 trillion of economic value generation—is moderately or highly dependent on nature and its services, a study by World Wide Fund for Nature (WWF) has revealed.

In its fourth Sustainable Banking Assessment (SUSBA), WWF found that while banks have made progress in integrating environmental and social considerations into their financial activities, there are large gaps that leave their portfolios vulnerable to risks arising from climate change and nature loss. 

But of the 48 banks assessed, only one Korean and three Singaporean banks prohibit the financing of coal-fired power plants without exception. While all five Japanese banks have a no-coal policy, they have exceptions for certain types of technology or carbon capture.

Not included in the report, Malaysia’s CIMB unveiled a comprehensive climate policy in December 2020 that rules out any exposure to coal power by 2040, surpassing the pledges made by the other banks.

In comparison, data from the Institute for Energy Economics and Financial Analysis (IEEFA) shows that more than 150 major global financial institutions now have coal exit policies in place, with 65 banks committing to tighter lending guidelines in 2020 alone. 

[Sonia Sambhi]

More: Banks in Southeast Asia lack recognition of deforestation and biodiversity risks

Posted in: IEEFA In the News

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