Climate change threats ignored by most Southeast Asian banks

(Eco Business, 22 Aug 2019) The vast majority of banks in Asean are indifferent to climate change and other environmental and social threats in their lending operations, despite the associated risks staring them in the face, a new WWF report has found.

Banks in the 10 countries comprising the Association of Southeast Asian Nations (Asean) are not responding fast enough to threats posed by climate catastrophe and environmental degradation, risking financial instability and social unrest in the region, a new assessment by non-governmental organisation (NGO) World Wildlife Fund (WWF) has found.

Of the 35 banks assessed, only four, all headquartered in Singapore or Thailand, met at least half of the criteria used in the study, which indicate whether banks heed environmental, social and governance (ESG) standards and thoroughly assess and mitigate social and environmental risks when deciding who to lend money to. More than 50 per cent of Southeast Asian banks fulfilled less than a quarter of the criteria, the report titled Sustainable Banking Assessment (SUSBA) reads.

On a more positive note, the study rates the three Singapore banks DBS, OCBC and UOB as top performers in the wake of shifts away from coal power lending and no-deforestation commitments, and has found that 74 per cent of the banks have made improvements over the last 12 months.

But the failure by most banks to thoroughly incorporate responsible financing practices into their business models may undermine such progress and sustainable development in Southeast Asia, the study says.

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Eco Business, 22 Aug 2019: Climate change threats ignored by most Southeast Asian banks