OCBC Bank Plays Critical Role In Energy Transition

By Siti Radziah Hamzah

KUALA LUMPUR, Aug 22 (Bernama) -- Singapore's OCBC Bank believes it has a critical role to play in enabling sustainable development and supporting a just energy transition by offering capital to projects and companies that directly contribute to a credible transition. 

Its head of sustainability office for global wholesale banking, Jeong Yoon Mee, said climate actions and a broader sustainability drive are shaping the industries and markets where OCBC’s clients are, including small and medium enterprises (SMEs), creating both emerging risks and business opportunities. 

bootstrap slideshow

She added that OCBC aims to partner with its clients on their transition, by co-creating workable solutions, promoting timely actions and offering workable transition financing for them.

"As a bank, our biggest impact is coming from the client activities that we finance; we recognise the need to transition, and that is why the bank has established net zero targets on our financed emissions to create a roadmap for all of us in this journey," she told Bernama on the sidelines of the sixth International Sustainable Energy Summit (ISES) 2024. 

Jeong said that to support the transition, the bank would finance and promote more renewable energy, lower carbon activities and energy efficiency projects such as greener buildings and the retrofit of existing facilities. 

bootstrap slideshow

As of the second quarter of 2024, OCBC’s sustainable financing assets were at SG$63 billion across markets and sectors, exceeding its S$50 billion by 2025 target ahead of schedule. 

Globally, the bank offered its clients more than 100 green and sustainability-linked loans in 2023 and advised more than 70 loans on sustainability, underpinning its position as a trusted sustainable finance partner for its clients and becoming the top sustainability coordinating bank in Asia ex-Japan by environmental finance.

It also has been fronting SME sustainable financing, leveraging on the SME sustainable finance framework that the bank launched in 2020. 

On OCBC 's innovative financing, Jeong said among them was the OCBC 1.5°C loan, which aims to incentivise corporates to commit to internationally recognised, science-based net-zero decarbonisation pathways. The bank has successfully offered the OCBC 1.5°C loan to its clients in Singapore and is looking to extend this financing solution to Malaysia. 

"It is very challenging and it is not for everybody as it is for the ones who are ready to commit to the 1.5°C trajectories, but we started this journey believing this is the right benchmark to aim to achieve net zero for all, and we wanted to recognise the true sustainability leaders," she said. 

“As an Asian bank, we are committed to working together with our clients in this journey and contributing to the sustainable future of this region.

“It is heartening to see many actions from corporates and governments for Malaysian’s net zero future and energy transition, we are fully committed to leveraging on our multifaceted businesses to channel capital towards sustainable initiatives that promote the greening of Malaysian economies,” she added.

Jeong noted that the way to net zero is not without challenges and may require all stakeholders’ concerted efforts to enable the necessary transition at scale and timely. She highlighted that the bank sees this as an opportunity to reinforce its partnership with clients by advising them on a credible transition while offering innovative transition banking solutions. 

ISES 2024 will be pivotal in advancing Malaysia's ambitious target of achieving a 70 per cent renewable energy mix in its power generation by 2050. The summit underscores the nation's commitment to reducing greenhouse gas emissions and attaining carbon neutrality by the same year.

Themed “Accelerating Energy Transition Through Innovation”, ISES 2024 mirrors Malaysia's dedication to propelling the global energy transition through innovative approaches and technologies to drive the energy transition process. 

Organised by the Sustainable Energy Development Authority (SEDA) Malaysia, ISES 2024 was hosted by the Ministry of Energy Transition and Water Transformation (PETRA) and managed by Qube Integrated Malaysia Sdn Bhd.  

-- BERNAMA