Singapore-based banking giant DBS' efforts in launching a climate policy seem to be problematic for some market watchers.
In a report on Eco-Business, Market Forces executive director Julien Vincent said the DBS's climate policy changes nothing about its involvement in the coal industry.
"Currently, DBS is involved in banking syndicates for new polluting coal power stations, and their policy would not take the bank out of a single one," Vincent told Eco-Business.
According to a study by Market Forces, DBS has been involved in 12 coal deals amounting to $885 million since 2012. In fact, it is currently co-financing four 1200 MW coal-fired power plants in Vietnam and is serving three planned-coal-fired projects in Indonesia as a financial adviser.
DBS is the first Southeast Asian bank to unveil a climate policy, which indicates its pledge to reduce its own environmental footprint, advocate for sustainable finance, and ensure climate-related financial disclosures.
It committed to stopping financing new coal-fired power stations only in countries belonging to the Organisation for Economic Co-operation and Development (OECD), which include nations like Japan, South Korea, and the United States.
Vincent argued that DBS's policy seem to indicate that it is still open for financing coal in developing countries.
"But there is a deep cynicism in coming out with language that might look like DBS is acting, but the practical application is that nothing has to change," he said.
He added, "This suggests that DBS thinks it's okay for wealthy countries to enjoy the economic and environmental benefits of renewable energy while poor countries can keep having their air polluted.
Commenting on the matter at hand, DBS chief sustainability officer Mikkel Larsen cited International Energy Agency data which demonstrates that while the region is taking steps to adopt a low-carbon energy, coal is still seen to take up 40% of Southeast Asia's energy industry.
"Many of our neighbouring developing countries are dependent on coal as part of their energy mix to deliver economic growth, and the financial system has a responsibility to ensure that the transition to renewables happens in a sustainable manner," Larsen explained.
He also made it clear that DBS would stop financing new coal mines and would only support clients with diversification efforts and strategies.
Coal is believed to be the biggest contributor to greenhouse gas emissions, making it the main force causing climate change.