DBS Launches Transition Finance Framework
(02 July 2020 – Singapore) DBS launched a sustainable finance, transition finance and taxonomy framework to help clients advance on their sustainability agenda.
The taxonomy outlines the way DBS manages transactions that are classified as “Green”, “Transition” and/or contributing to the United Nations Sustainable Development Goals (UN SDGs). It also summarises a list of eligible economic activities, for example the use of recycled plastics for apparel making, or an electricity grid upgrade to enable integration of intermittent renewable energy.
DBS said it is the first Singapore bank to offer transition financing with its latest framework. It will evaluate the transitional qualities of the economic activities, and whether its clients have a strategy to adapt their businesses to be in line with the Paris Agreement.
“There are many interpretations of what constitutes transition finance. The bottom line is we cannot afford to dismiss clients who carry out activities which are less than dark-green but are nonetheless part of the mainstream economy instrumental to getting us below 1.5-degree temperature increase. Every transitional step towards reducing carbon footprint will make a significant, cumulative difference over time,” said Institutional Banking Group Head of Sustainability Yulanda Chung.
DBS said the framework has received a second party opinion from CICERO Green, which has opined on the taxonomy and provided a broad, qualitative review of the climate and environmental risks and ambitions.