Accelerating the transition to a net-zero future

Why this is Material to Us
Climate change presents ever-growing financial risks to our operations and business. Consequently, there have been increasing expectations on transparency around climate-risk reporting and transition planning from both internal and external stakeholders. Effectively managing these concerns is vital for the Bank to ensure our continued success as a regional leader in sustainable finance. Equally vital are our actions to capitalise on the global shift towards a low-carbon economy, which presents opportunities to work with our clients to finance the transition to net zero.

Our Management Approach
As a financial institution that is a connector of capital, we recognise that we have the responsibility and ability to play a critical enabling role in driving climate action.

We will manage the opportunities and risks of climate change by aligning our portfolio with our commitment to achieve net zero by 2050, enhancing our knowledge and capabilities in climate risk management and managing the Bank’s operational environmental footprint. We continue to face challenges in obtaining accurate and complete data in the calculations. These challenges have not and will not deter us from intensifying our actions to achieve our net-zero ambitions.

With increased emphasis on the net-zero transition, we participated actively in the MAS’ consultation on a set of supervisory guidelines on transition planning. We will review the Bank’s relevant policies and processes to take into consideration clients’ transitional activities, as industry practices, regulatory expectations and the knowledge base on transition planning evolve.

Find out more about:
Our net-zero targets in our Net Zero Report
Our contributions towards net zero
Managing our environmental footprint

Why this is Material to Us
The world is currently confronting a triple planetary crisis: climate change, biodiversity loss and pollution. These interconnected challenges threaten the foundations of sustainable development and present risks to financial institutions like OCBC. They introduce additional risks to our clients – especially in certain sectors in our portfolio – which can result in reputational harm and increased credit risk exposure for the Bank. To address these concerns, we focus on mitigating risks to our business while also supporting clients in transitioning to a low-carbon economy in alignment with the Paris Agreement.

Through robust ESG risk management and responsible lending, we aim to reduce exposure to climate-related risks, protect the long-term value of our clients’ assets and contribute to a sustainable future. Our goal is to safeguard business interests while empowering clients to achieve greener growth.

Our Management Approach
Our approach embeds key principles of risk management and responsible lending, recognising the environmental and social impacts of our financing activities.

The Responsible Financing Framework and Policies guide OCBC’s approach to ESG risk management within our lending practices. Our Framework and Policies outline a comprehensive ESG risk management approach that governs lending and debt-related activities, including debt issuance and underwriting, and apply to both new and existing corporate, commercial and institutional clients. A key component of this approach is incorporating transition financing solutions that support clients in shifting towards more sustainable business practices.

We maintain a strict policy of non-engagement in financing activities that are under our exclusions and prohibitions lists, which show clear evidence of unmitigable harm to the environment, people, or communities, or that involve a breach of local regulations. In line with our climate commitments and given the interconnectedness between climate change and nature, we will not knowingly finance activities that have clear evidence of irreparable harmful impacts to the preservation of diverse ecosystems, which are vital for carbon sequestration and mitigation of extreme weather.

From the outset, our exclusion list prohibits the financing of projects that have an adverse impact on nature and biodiversity. Furthermore, ESG risks in agriculture and mining, which are sectors broadly recognised to have an outsized dependency and impact on ecosystem services, are addressed in our Responsible Financing Policy for Agriculture and Responsible Financing Policy for Mining and Metals respectively.

Find out more about:
Our Responsible Financing Framework and Policies

Why this is Material to Us
As a leading financial services institution in Asia, OCBC recognises the critical role we play in engaging and supporting clients in their net-zero transition journeys. Leveraging our position as a connector of capital, we collaborate with ecosystem partners to provide streamlined tools, resources and expert advisory services that enhance clients’ transition efforts.

On top of that, our net-zero commitments necessitate offering innovative and tailored sustainable financing solutions to help clients achieve their sustainability goals. This entails widening our array of products to support all segments of our customer base in their transition journeys, including the SME and retail clients, who make up a sizeable portion of our portfolio.

Our Management Approach
Since 2018, the Bank has delivered financing solutions that contribute to sustainable development. In 2024, we continued to extend green and transition financing to clients across our key markets, pioneering first-in-market sustainable finance programmes for various sectors and businesses, including SMEs. We further improved our support for our retail clients and investors by providing them with access to tools that track and monitor the sustainability performance of their portfolios.

To accelerate the transition to a net-zero future, we are committed to mobilising all sectors of the economy to ensure necessary actions are taken across industries and value chains. Through our sustainable financing initiatives, we actively support companies of all sizes in our key markets on their transition journeys.

Recognising the importance and challenges of addressing supply chain sustainability, we have also begun partnering with clients who have large supply chains. By leveraging our strong SME sustainability financing capabilities and collaborating with key ecosystem partners, we aim to drive meaningful change and support our clients in their sustainability efforts.

In our pursuit of net zero, we must not overlook the importance of an inclusive transition. Therefore, we are committed to promoting efforts that address the needs of vulnerable communities by financing projects that generate tangible benefits for these groups and integrating social KPIs into our sustainability-linked financing solutions.

Find out more about:
Sustainable Banking for Individuals
Sustainable Banking for Businesses