Singapore’s UOB Stops Financing New Oil and Gas Projects in Net-Zero Push

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Singapore’s UOB Stops Financing New Oil and Gas Projects in Net-Zero Push

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Major Singaporean lender United Overseas Bank (UOB) [UOB:SP] vowed to end new project financing for upstream oil and gas projects after 2022, as reported by Strait Times on October 31. UOB claimed that it is the first bank in Asia to make such a promise. So far, the bank has already ceased financing for coal-fired power plants and new lending for coal mines, in a move to fulfill its 2050 net-zero emissions commitment. In addition, the lender plans to withdraw all existing loans for the coal industry by 2039. 

As the second bank in Singapore to announce a net-zero plan behind DBS [DBS:SP], UOB set out separate emissions targets in six carbon-intensive sectors it finances, namely power, automotive, oil and gas, real estate, construction, and steel. Loans for these sectors account for 60% of the bank’s corporate lending portfolio. For instance, it intends to reduce the emissions intensity, measured in kilograms of carbon dioxide produced per megawatt-hour (MWh) of electricity, of its lending portfolio in the power sector by 61% by 2030 and 98% by 2050. On the other hand, it vows to increase financing for renewable energy projects to advance its net-zero target. Similarly, another major Singaporean lender OCBC Bank [OCBC:SP] also pledged to announce carbon reduction plans for separate industries by 1H23.