Strong action is needed to address global issues like climate change, and Singapore is contributing to the development of a future that is sustainable. Singapore has established a goal of achieving Singapore net zero emissions of greenhouse gases by 2050. Everyone may contribute to the Green Plan, which aims to position Singapore to achieve its long-term goals of having net zero emissions by 2050 and to deepen its pledge to environmentally friendly growth and living.
The Intergovernmental Panel on Climate Change (IPCC) has asked governments, individuals, and corporations to work together to reduce greenhouse gas (GHG) emissions to reach a net zero level in order to put an end to global warming to 1.50 degrees Celsius over the period prior to industrialization.
“Decarbonization” is a means of reducing releases of greenhouse gases into the environment. Carbon dioxide, or CO2, is mostly to blame for this issue. It also has to do with lowering other dangerous gases such as methane (CH4), nitrous oxide (N2O), and ozone (O3).
Regardless of the region, industry, or sphere they operate in, industries—aside from transportation and power generation sectors closely linked to decarbonization—are also accountable for effectively lowering the amount of carbon dioxide along with other gasoline emissions. By moving to renewable energy sources, converting from petrol or diesel to electric or hybrid vehicles, and utilising carbon capture and storage technologies to halt CO2 emissions, decarbonization can be accomplished.
Additionally, $3.5 trillion is to be invested annually in the development of fresh sources of renewable energy for clean energy, and almost every industry would need a period of higher investment.
What role can financial institutions like DBS play in helping Singapore reach net zero emissions?
The first bank in Southeast Asia to join the Net-Zero Banking Alliance (NZBA) in Singapore and release a comprehensive set of emission reduction targets for their Scope 3 funded emissions is DBS. The bank uses the reduction goals as guidance when strategically allocating funding to low-carbon options rather than high-carbon operations.
To achieve its decarbonization goals, DBS has successfully identified a few industries, which are:
- Automobile
- Oil & Gas
- Aviation
- Real Estate
- Shipping
- Power
- Steel
Apart from these, the chemical and food industries have also been acknowledged for their contributions towards establishing a foundation for lowering emissions. The seven decarbonisation targets were developed using a variety of sources, including the International Energy Agency’s Net Zero Emissions by 2050 Scenario (NZE).
Furthermore, DBS has successfully lent SGD 480 billion in transition finance in 2022 by offering loans linked to sustainability and use-of-proceeds loans with a transition focus.
One such instance is the bank’s support of India’s initiatives to double its capacity for ethanol distillation and incorporate up to 20% ethanol into petrol by 2025.
One of India’s top producers of sugar and renewable energy received a 1,750-million-rupee transition loan from DBS, the country’s first foreign bank. In order to expand the organisation’s sustainable bioethanol business, the funding was a component of their overall decarbonisation plan.
Climate Impact X (CIX) is a global platform and exchange for premium carbon credit trading that DBS and other organisations created together. Businesses can investigate cutting-edge sustainability projects and invest in environmentally friendly goods and services. These initiatives not only hasten Singapore’s financial transition to low-carbon or Singapore net-zero emissions, but they also open up new and intriguing prospects.
By participating in these initiatives, businesses can enhance their reputation as environmentally responsible entities and attract socially conscious consumers. Furthermore, the collaboration with well-known committees and local conferences ensures that these sustainability projects are backed by credible expertise and insights, increasing their chances of success and impact.