Asian Banks 'falling Short' On Decarbonisation: Study

Banks in Asia are "falling short" when it comes to meeting global pledges to tackle climate change and aligning with the decarbonisation aims of their countries, according to a study published on Wednesday.

Nearly 200 countries signed a pact in the UK last year calling on banks and financial institutions across the world to mobilise more finance to help achieve global climate goals and to seek innovative ways to pay for climate adaptation.

A review of 32 banks throughout East and Southeast Asia finds, however, that none had made any clear commitments or adequate implementation plans to meet the goals of the Paris climate agreement. The study was conducted by Asia Research and Engagement (ARE), a Singapore-based environment group.

"Asia's banks are falling short in aligning with national decarbonisation policies and are not yet taking the steps necessary to meet global climate goals," ARE said.

The banks have been quick to launch green financial products but have lagged when it comes to cleaning up their existing products and carrying out policies required to divert capital away from carbon-intensive industries, the study found.

"This raises concerns of greenwashing: that banks are seeking a marketing benefit for sustainable finance deals while providing higher levels of finance to dirty industries," it said.

Of the banks reviewed in major economies such as China, Japan, South Korea, Singapore and Indonesia, only nine had long-term net-zero commitments for the emissions they finance, while only 13 had policies prohibiting the financing of new coal-fired power.

The highest-ranked Asian bank was DBS in Singapore, which has set a long-term net-zero target but has not yet made any clear short- and medium-term plans, and also had a number of gaps in its financing policies. (Reuters)