Singapore's OCBC to stop financing oil, gas projects

Singapore's OCBC on May 16 announced that it will not provide project financing to upstream oil and gas projects that received approval for development after 2021. This decision is part of the bank's efforts to decarbonise the sector as it aims to achieve net-zero financed emissions by 2050.

OCBC has set decarbonisation targets for six sectors that it finances, which are power, oil and gas, real estate, steel, aviation, and shipping. For the oil and gas sector, the bank has set a target of a 35% reduction in absolute emissions by 2030.

In addition to halting financing for new upstream oil and gas projects, OCBC aims to reduce emissions in power sector projects it finances by 55% by 2030 and achieve 100% emissions reduction by 2040.

The bank has set interim targets for 2030 to ensure progress towards its ultimate goal of net-zero financed emissions by 2050. These targets will be reviewed periodically, at least once every five years, to align with evolving climate science and incorporate new data from clients, it said.

OCBC's decision reflects a growing trend among financial institutions to align their lending practices with environmental sustainability goals. In 2021, the US, Canada and 18 other countries vowed to stop the public financing of oil, gas and coal projects overseas and divert funds to clean energy instead. Five development institutions, including the European Investment Bank and the East African Development Bank, also signed.