September 23, 2021

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DBS boosts sustainable finance target to S$50b by 2024, Banking & Finance

Thu, Feb 04, 2021 – 9:51 AM

UPDATED Thu, Feb 04, 2021 – 10:44 AM

DBS has raised its sustainable finance target for 2024 to S$50 billion, which is well over twice of the lender’s previous S$20 billion target for the same year.

The move stems from more companies seeking to advance their corporate sustainability agenda through sustainable financing, said DBS in a media statement issued on Thursday.

“We thought our earlier target of S$20 billion for renewable and other green financing would be a stretch and were greatly heartened at the level of customer interest in moving from business-as-usual mode to adopting sustainability in their strategies,” said Tan Su Shan, DBS’s group head of institutional banking.

Ms Tan notes that many companies have doubled down on their environmental, social and governance (ESG) commitments since the Covid-19 pandemic, with a marked increase in the number of corporate interest in sustainable financing.

In its announcement, DBS says the new green financing commitment reinforces its efforts in “responsible banking” – a key pillar of DBS’s approach to sustainability. Raising the target accelerates the bank’s sustainability agenda in helping customers incorporate sustainable business practices into their overall business strategy, it added.

The bank said it continues to see a good mix of sustainable financing deals across the markets it operates in, and across sectors. It is also involved in financing renewable energy equipment makers and electric vehicle battery plants, even as the green loan market continues to be dominated by borrowers in the real estate sector.

Based on Ms Tan’s observations, ESG considerations are “very much at the forefront” among company stakeholders, who also want to understand and measure the value companies create beyond profits.

“To remain relevant, companies will need to balance profits with meeting the needs of society… We want to do our part to help address key areas of environmental and social concerns and support Singapore in its ambition to be a green finance hub,” she said.

Since 2018, DBS has concluded over 100 sustainable financing deals worth about S$17 billion in total.

Landmark sustainable and green financing transactions done by DBS in 2020 include the US$1.11 billion dual-tranche green project bond by Star Energy Geothermal, PSA Marine’s three-year 30 million euro (S$48.1 million) equivalent sustainability-linked loan, and the 500 million euro Korea Housing Finance Corporation Covid-19 social bond.

OCBC in June said it plans to expand its sustainable finance portfolio to S$25 billion by 2025. The bank cracked its 2022 goal of S$10 billion in sustainable finance in the first quarter of 2020 instead, about two years ahead of its target.

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