SINGAPORE (June 29): DBS has published a sustainable and transition finance framework and taxonomy on Monday to help clients who are furthering their sustainability agenda.
With the launch of the taxonomy, DBS will be the first Singapore bank to offer transition financing.
DBS says the taxonomy will serve as a reference to guide clients to adapt and build resilience in the face of climate change, resource scarcity and address critical global issues such as social inequality.
To encourage greater transparency in sustainable and transition economic activities, the taxonomy outlines the way DBS manages transactions that are classified as “green”, “transition” and/or contributing to the United Nations Sustainable Development Goals (UN SDGs).
The taxonomy also summarises a broad list of eligible economic activities – including the use of recycled plastics for apparel making, or an electricity grid upgrade to enable integration of intermittent renewable energy.
Yulanda Chung, DBS’s head of sustainability for the institutional banking group, said that addressing transition financing is important as achieving climate goals require a significant reduction of carbon emissions.
“In many sectors, clients are realising that decarbonising solutions are at a nascent stage of growth. As a result, solutions may not yet be available at scale due to cost and technological barriers,” she says.
“We cannot afford to dismiss clients who carry out activities which are less than dark-green but are nonetheless part of the mainstream economy instrumental to getting us below 1.5-degree temperature increase. Every transitional step towards reducing carbon footprint will make a significant, cumulative difference over time,” she adds.
Tan Su Shan, DBS’s group head of institutional banking, said that the introduction of this framework reinforces the bank’s efforts to advance sustainable development by facilitating the categorisation, monitoring and reporting of sustainable financing not just in DBS but in the banking industry.
“As a purpose-driven bank, we are constantly looking for ways that our business can leave a positive impact. This framework is an extension of that commitment, with a comprehensive approach that can be summed up in three ‘T’s – Transition, Transactions and Transparency,” she says.
“While pursuing our own sustainability goals, we want to encourage companies to transition towards more carbon-efficient operations by considering commercially viable greener alternatives,” she adds, highlighting the bank’s track record of almost 100 deals worth $12 billion over the last two-and-a-half years.
As at 12.09pm, shares in DBS were changing hands 31 cents lower, or 1.5% down, at $20.51.
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