OCBC will seek to more than double its current green loan assets to reach $10 billion by 2022.
Oversea-Chinese Banking Corporation aims to build a sustainable finance portfolio totalling $10 billion by 2022 with a focus on initiatives related to environmental, social and governance (ESG); renewable energy; water; and green transportation. According to OCBC’s head of structured and sustainable finance Mike Ng, the bank has nearly reached the halfway mark.
«There's much greater awareness now and a lot of pressure points on companies such as investors, non-government organisations, consumers and regulators,» Ng said in a «Bloomberg» report.
Defined Loans
According to Ng, the Asia Pacific Loan Market Association (APLMA) played a key role in defining green loans and their related principles with a focus on transparency, specific usage of proceeds and environmental impact.
Bloomberg data notes that Ng and his five-strong team have participated in more than $500 million of green lending including in a $785 million to Frasers Property in March. Under the APLMA framework, the five-year loan involves refinancing for a Singapore-based project which uses low emissivity double-glazed glass and recycled water for toilet flushing.
Cannot Change Overnight
Part of OCBC’s pursuit to become a green loan leader involves its pledge to stop funding new coal-fired power plants to encourage greater renewable energy usage but underlines that such plans do not extend to palm oil plantations – a major source of discontent in the region due to the seasonal haze caused by illegal deforestation.
«Can the world do without palm oil? Probably not,» Ng added. «How to manage those risks and encourage more sustainable practices is then the question. It's just not practical for us to exit these sectors overnight.»
