The Business Times: Cut Coal Loose, Climate Advocates Tell Banks

Banks in South-east Asia must demonstrate stronger resolve to cut financing to high-carbon sectors as they play a critical role in supporting the region's emerging markets through the climate crisis.

A recent report by Singapore-based ESG (environmental, social and governance) risk and strategy consulting firm Area Research & Engagement (ARE) shows that most banks in Asia still have not quit coal. Even for those with restrictions on coal power, such policies often have loopholes.

Observers BT spoke to say banks should set clear short- and medium-term goals, and disclose financed emissions for sectors they are highly exposed to. Timothy Colyer, Asia Pacific climate and sustainability lead at consulting firm Oliver Wyman, said many banks are working on living up to their climate pledges.

"I think some banks are not getting the credit for some of the things that they're doing, and they are being treated with an undue level of cynicism," he said. "Many are looking for policies that allow them to support their clients in the transition that will encourage them to be financing new activity and that will, over time, phase out the dirty activity."

Still, Colyer acknowledged that ARE's report is an accurate reflection of where the industry is today. "My guess is that if they do that report again in a year, it's still going to show significant (improvement), but we're going to see a number of the leading institutions looking a lot better."

The Russia-Ukraine energy crisis could also spur a shift to renewables, he said, as countries seek to reduce dependence on Russian gas.

Read the full article here.