Helping SMEs Accelerate Their Transition to SustainabilitySMEs account for over 95% of enterprises in the region and play a crucial role in addressing climate change.
OCBC launched the OCBC SME Sustainable Finance Framework in 2021 to simplify SMEs' access to green loans. In 2022, over 600 SMEs and mid-cap corporates in the region took up sustainable financing with OCBC – three times higher than a year ago. Total sustainable finance extended to these companies reached over S$3 billion by end-2022, growing 50% year-on-year.
As more SMEs ramp up their sustainability ambitions, OCBC is evolving the way we support them. We have started to engage SMEs on sustainability-linked loans (SLL) to help them shift their business operations towards more sustainable models, beyond just green assets. One such company we extended an SLL to was marine services company Dyna-Mac.
We have also embarked on industry partnerships to extend more self-help emissions measurement tools to SMEs to help them capture data. One such tool is the Global Compact Network Singapore's Carbon and Emissions Recording Tool that helps firms compute emissions data on energy, water and waste, which they can use to formulate their emissions reduction plans. Dyna-Mac utilised this tool to apply successfully for the SLL.
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We launched the OCBC SME Sustainable Finance Framework in 2021 to simplify SMEs' access to green loans.
Over 600 SMEs in the region took up sustainable financing with OCBC in 2022, three times higher than a year ago.
Innovative Market-first Sustainable Finance Solutions for CorporatesAs a leading bank for sustainable finance in the region, one of OCBC's priorities is to develop bespoke, innovative sustainable finance solutions for corporates to realise their sustainability and net zero ambitions.
We collaborated with Frasers Centrepoint Trust in Jul 2023 on Singapore's first green financing solution that comprised a S$419 million green loan and carbon credit. Proceeds from the green loan will be used for refinancing a maturing facility, asset enhancement initiatives, decarbonisation projects and other general corporate purposes. The carbon credits, sourced through OCBC's Emissions Trading Desk, will go towards investing in Verra or Gold Standard certified carbon reduction nature-based projects.
In Mar this year, OCBC launched a new loan for corporates, named the OCBC 1.5°C loan, as part of its commitment to supporting the world's low-carbon transition. This financing solution incentivises corporates to set and work towards clear carbon emissions reduction targets aligned with internationally recognised, science-based net zero decarbonisation pathways for their sectors. When the targets are met or exceeded, corporates will get a reduced interest rate on their loans.
We are committed to do our utmost to direct capital to projects that bring about meaningful change and support our customers to transition to a low-carbon economy.
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OCBC launched Singapore's first green financing solution comprising a S$419 million green loan for Tampines 1 retail mall and carbon credits.
Over S$5 Billion in OCBC Eco-Care Loans Extended Since Mar 2021OCBC has seen strong take-up for its OCBC Eco-Care Loans, with more than S$5 billion extended since its launch in Mar 2021.
This is a growth of more than seven times from 2021, driven by OCBC Eco-Care Home Loans and OCBC Eco-Care Car Loans. This demand reflects Singaporeans' desire to adopt greener lifestyles.
OCBC Eco-Care Loans encourage customers to make sustainable choices through various incentives. For instance, customers that qualify for the OCBC Eco-Care Loans are offered preferential rates. OCBC Eco-Care Car Loan customers are also given free charging credits at selected charging points across Singapore.
OCBC expects OCBC Eco-Care Loans to continue their promising growth. This will come on the back of the Singapore government's sustainability push, led by the Singapore Green Plan 2030, as well as consumers' increasing willingness to choose greener alternatives.
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Home and car loans drove the seven times growth of OCBC Eco-Care Loans.
OCBC Eco-Care Car Loan customers are given free charging credits at selected charging points.
Setting Science-based Decarbonisation Targets for Six Key SectorsAs part of its commitment to achieve net zero in financed emissions by 2050, OCBC has set science-based decarbonisation targets for six sectors – power, oil and gas, real estate, steel, aviation and shipping – and outlined the key actions it will take to meet these targets.
These six sectors represent the most greenhouse gas emissions-intensive sectors that OCBC finances. 42% of OCBC's corporate and commercial banking loan portfolio falls within the scope of the targets as the Bank focuses on parts of the sector value chains responsible for the majority of the emissions. The availability of established and credible reference pathways for these sub-sectors is another key consideration.
OCBC will not extend project financing to upstream oil and gas projects that obtained approval for development after 2021 as part of its decarbonisation efforts for this sector. This is on top of the Bank's target of 35% reduction in absolute emissions by 2030 for the sector.
The targets are aligned to internationally recognised, science-based pathways geared towards achieving a net zero level of greenhouse gas emissions by 2050 to limit global warming to 1.5°C. OCBC will continue to develop sustainable financing solutions for its corporate clients to finance their green and transition business activities.
Find out more here.
OCBC has set science-based decarbonisation targets for six sectors to achieve net zero financed emissions by 2050.
OCBC will not extend project financing to upstream oil and gas projects that obtained approval for development after 2021.