Asian banks ‘falling short’ on decarbonisation
There are nearly 10,000 shadow banks in India but just over two dozen are thought to pose systemic risks, sources said. PHO-TO: REUTERS
Banks in Asia are “falling short” when it comes to meeting global pledges to tackle climate change and aligning with the decarbonisation aims of their countries, according to a study published on Wednesday.
Nearly 200 countries signed a pact in Glasgow last year, calling on banks and financial institutions across the world to mobilise more finance to help achieve global climate goals and to seek innovative ways to pay for climate adaptation.
But a review of 32 banks throughout East and Southeast Asia showed that none had made any clear commitments or adequate implementation plans to meet the goals of the Paris climate agreement, according to Asia Research and Engagement (ARE), a Singapore-based environment group.
“Asia’s banks are falling short in aligning with national decarbonisation policies and are not yet taking the steps necessary to meet global climate goals,” ARE said.
The banks have been quick to launch green financial products but they have lagged when it comes to cleaning up their existing products and carrying out policies required to divert capital away from carbon-intensive industries, it said.
“This raises concerns of greenwashing that banks are seeking a marketing benefit for sustainable finance deals while providing higher levels of finance to dirty industries,” the report said.
Of the 32 banks in major economies like China, Japan, South Korea, Singapore and Indonesia, only nine had long-term net-zero commitments for the emissions they finance, while only 13 had policies prohibiting the financing of new coal-fired power.
Published in The Express Tribune, March 24th, 2022.
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