Singapore's OCBC bank has announced its latest decarbonisation goals, under which it will stop financing upstream oil and gas projects that received approval for development after 2021.
OCBC on 16 May unveiled its latest decarbonisation targets for the six sectors it finances that are the most greenhouse emissions intensive — power, oil and gas, steel, shipping, aviation and real estate, as part of its goal to hit net zero in its financed emissions by 2050.
The bank will no longer extend financing to upstream oil and gas projects that were approved for development after 2021. This is in addition to the bank's target to reduce absolute emissions in the oil and gas sector by 35pc by 2030 and 95pc by 2050.
OCBC also aims to cut emissions in power sector projects it finances by 55pc by 2030 and 100pc by 2040. It targets a 66pc emissions reduction in the aviation sector by 2030 and 100pc by 2050.
The 2030 targets have been set as interim checkpoints for the bank to ensure that it is poised to hit its 2050 goal, said OCBC. The targets will be reviewed at least once every five years as more client data becomes available, it added.
The bank has committed more than S$25mn ($18.6mn) in decarbonisation efforts across its key markets, to install energy-efficient technology and up the share of renewables in its energy mix. It also claims to have achieved carbon neutrality for operational emissions in 2022.
OCBC is the latest in a number of Asian financial institutions that have set environmental targets for financing activities. These include fellow Singaporean banks DBS and United Overseas Bank, which in November 2022 also committed to stop financing upstream projects.
OCBC also joined the Net Zero Banking Alliance (NZBA) in October 2022. The NZBA also includes US-based banks such as JP Morgan Chase and Bank of America. A key principle of the NZBA is that the targets set out by signatory banks must be in line with the stipulations of the UN's Paris climate agreement.
