Environmental and social risk management processes at most Asian lenders made little enhancements since 2021, according to a WWF sustainability report, with a minority of leaders widening the gap.
Half of the banks in Asia have made little to no progress in enhancing their environmental and social (E&R) risk management processes since 2021, according to WWF’s «Sustainable Banking Assessment 2022», with many not even having basic policies and procedures in place.
On average, lenders in Singapore, Indonesia and Malaysia met at least 70 percent of the criteria for recognizing nature-related risks but this was not reflected in client expectations and policies. Only 40 percent of the criteria is met by Singaporean banks for setting client expectations on nature-related risk, while other countries assessed only reached the 20 percent threshold or lower.
Widening Gap
Despite limited progress from half of the lenders, the upper half is rapidly adopting related policies and widening the gap between sustainability leaders and laggards.
«While net-zero commitments among the assessed banks have increased to 39 percent in 2022 from 15 percent in 2021, it is imperative for the remaining banks to also make these commitments,» said Kristina Anguelova, WWF Singapore’s head of Asia sustainable finance.
The report covers the integration E&S risk management policies and processes at 36 ASEAN banks alongside 10 Japanese and Korean banks.
