Singaporean Banks continue to fund the coal industry, despite 2018 being named ‘the year of climate action’ by the government of Singapore.

Singapore Banks Fund Coal

Market forces analysed lending activity from Singapore's big three banks revealing OCBC as Singapores dirtiest bank, with a total of US$1,142 million going towards the coal sector.

Oversea-Chinese Banking Corporation (OCBC), DBS Bank and United Overseas Bank (UOB) were analysed in the study looking at lending patterns to coal companies and projects since 2012.

OCBC lent a total of US$1,142 million to the coal sector through 14 deals. DBS participated in 12 deals worth $885m and UOB participated in five deals worth $262m.

Market Forces Executive Director Julien Vincent said, “banks have a pivotal role to play in determining our energy mix, but despite global investment in new renewable energy outstripping fossil fuels, Singaporean banks remain heavily skewed in favour of polluting power.” 

“Whilst the Singaporean Government has declared 2018 the ‘year of climate action,’ the country’s banks appear to be stuck in the last century in terms of their lending practices.” 

 “If the world is to meet the agreed goal of keeping global warming to less than 2˚C, 80% of existing fossil fuel reserves cannot be burned. Financing new coal-fired power stations is simply off the cards,” he said.

However, lending continues as DBS has been named as part of a syndicate in four 1200MW coal-fired power plants in Vietnam – Nam Dinh 1, Nghi Son 2, Vinh Tan 4 and Vung Ang 2, and is also financial adviser for a number of planned coal-fired plants in Indonesia including the Jawa-6 (2000MW), Jawa-9 (600MW) and Jawa-10 (660MW) plants.

In November 2017, Mike Power, Chief Operating Officer for Technology and Operations, DBS Bank stated that “climate change is among the most pressing challenges of our time, and one that needs to be tackled urgently if we are to preserve the habitability of our planet.[1]

“For DBS to acknowledge the severe risks that climate change poses to humanity, while continuing to fund new coal projects that threaten our ability to even contain those risks is an act of breathtaking hypocrisy,” said Vincent.

There is no climate policy in place in any of Singapore’s big banks, let alone a commitment to restricting lending to one of the biggest sources of greenhouse pollution.

While major banks in the US and Europe are adoping policies to end direct financing of coal power planrs, no Asian bank shows sign of following suit.

 “If Singapore’s banks want to see themselves as leaders on climate change, they can start acting as leaders. At the moment, OCBC, DBS and UOB are well behind their global competitors on policy action to restrict fossil fuels and boost renewables. 2018 needs to be the year in which they catch up,” said Vincent.