As part of continued efforts to tackle climate change and work towards a lower-carbon future, DBS has announced that it is committed to zero thermal coal exposure by 2039, the first Singapore bank to do so.
To achieve this goal, the bank will:
- cease the onboarding of new customers who derive more than 25% of their revenue from thermal coal with immediate effect, and lower the threshold as time progresses
- stop financing customers who derive more than 50% of revenue from thermal coal from January 2026, except for their non-thermal coal or renewable energy activities, and lower the threshold as time progresses
- leverage DBS' Sustainable and Transition Finance Framework to achieve meaningful decarbonisation in sectors that remain reliant on thermal coal. This will be conducted through engagements with customers to establish their transition strategies, and the incorporation of greenhouse gas (GHG) reduction targets in all applicable sustainability linked loan structures
- disclose DBS’ thermal coal exposure annually in its sustainability report to provide transparency on progress made.
“Every year counts in the journey towards a low-carbon future, and we recognise the increasing need for transition financing to help industries gradually navigate away from brown to green,” says Tan Su Shan, group head of institutional banking, DBS. “In turn, renewable energy will increasingly take centre stage as a core component in the world’s transition towards net-zero [GHG emissions]. To spur the development of renewables, we have upped the ante on financing projects by leading energy players in the region with the aim to scale the reach and supply of renewable energy in the near future.”
DBS has progressively refined its coal commitments to tackle climate change over the last few years. In February 2018, the bank issued a statement to restrict financing to only coal-fired power projects that adopt more advanced technologies that emit lower-carbon emissions and to stop financing new thermal coal-mining projects. This was followed by a blanket cease in financing any new coal power assets in April 2019.
At the same time, the bank continues to ramp up support towards the renewables sector as evidenced by its increased exposure to renewable energy projects of S$4.2 billion in 2020 versus S$2.85 billion in 2019.