Eric Lim, Chief Sustainability Officer, United Overseas Bank, gives texture to sustainable and green financing - not as some esoteric concept, or yawn inducing idea, but in clear cut plans that involve financing and partnerhips. For instance, Asean attempts to move away from coal as its main source of energy. Yet the region can’ just jump to renewables overnight.
Countries such as Indonesia will need to transition to renewables as renewable infrastructure builds out. Then there is food and agriculture, and sustainable farming. In a third opportunity, corporates have resorted to greening buildings (the built environment usually requires financing), and the government is encouraging the concept of smart cities. Digitalisation and green technology could go a long way to help industry with sustainable manufacturing and logistics.
The new infrastructure for renewables, sustainable farming, greening the built environment in cities and green technology required by Asean offer banks like UOB potential loans of US$1 trillion.
Lim says UOB is approaching sustainable financing as an entire ecosystem. “UOB has three major sustinable financing frameworks from where we can build ecosystems, UOB Smart Cities, UOB Real Estate and UOB Circular Economy. These will match up with the four [opportunities].”
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An example of a sustainable financing framework is the bank’s U-Solar intergrated solar power ecosystem. Both individuals and businesses can switch to solar energy where UOB’s solar partners will handle the installation of solar panels, and provide maintenance with no added cost. UOB provides financing under the U-Solar programme.
“The biggest challenge for Asean is energy generation. To build renewable energy assets, we can work with solar panel companies and companies with the ability to build solar farms, and connect these with companies who want to buy renewables,” Lim suggests.
“I want the dollars and environmental programme of our loan portfolio to have a tangible environmental impact” Lim says. For instance, during the life of a solar energy programme, of around 20 years, 1.8 million tonnes of CO2 is avoided, and equivalent to the removal of 355,000 cars from the road.
By 2050, the nations that signed up to the Paris Accord on Climate Change should have reached net zero. In 2020, these nations which signed the Paris Accord have provided plans to cut down emissions, eg the Singapore Green Plan. As a result, banks stand ready to finance new infrastructure and technologies that will get us to net zero.
