Singapore Net Zero Commitment: Supporting It through Sustainable Financing

When it comes to one of the greatest milestones in 2050, it is attaining net zero emissions worldwide. As stated in the 2015 United Nations Paris Agreement, achieving this objective globally would be among the most effective ways to keep the earth’s temperature increase to no more than 1.5°C above pre-industrial levels.

Net zero emissions can be achieved when the level of greenhouse gases removed from the atmosphere equals the level of greenhouse gases sent out into it. Governments of different countries are developing and implementing measures to reduce carbon emissions and building the necessary infrastructure to support a green economy.

According to the Intergovernmental Panel on Climate Change (IPCC), some Asian countries are currently at high risk for industrial system failure and energy instability, and as their populations increase, so will the uncertainty about climate change. 

Singapore declared that by 2050, it would surpass its current climate target of net zero emissions. With four key pillars to support Singapore net zero emissions, the country aims to quicken the low-carbon transition across industrial sectors, society, and the economy.

What to Do for the Net Zero Transition?

Asia-Pacific nations are under intense pressure to reach their officially set decarbonization targets while also delivering socioeconomic development as the move towards net zero gains traction.

Further, businesses should adjust to how climate change will affect their business operations, profitability, and risk. These demands for transforming businesses to achieve net-zero emissions are only going to get stronger.

Reducing CO2 emissions caused by human activity with the ultimate goal of doing away with them is known as decarbonization. Because decarbonization is crucial to controlling global warming, it has become a global necessity and a top priority for society, businesses, governments, and society at large.

Swift and effective solutions are required for the world to become carbon-neutral by 2050. Synthetic fuels made from renewable energy sources and green hydrogen will be essential components of those solutions.

How DBS Can Assist Singapore to Achieve Net Zero Emissions?

DBS is the first financial institution in Southeast Asia that has come out with an extensive list of milestones for emission reduction as a part of its Scope 3 funded emissions by joining the Net-Zero Banking Alliance (NZBA), Singapore. These goals for emission reduction would help the bank allocate funds more efficiently to low-carbon alternatives, as opposed to activities with high carbon footprints. 

Some of the principal industries shortlisted for meeting its decarbonization goals include steel, oil and gas, automotive, aviation, shipping, power, chemicals, agribusiness, and real estate. Furthermore, DBS has effectively set aside and used SGD 480 million in transition funding in 2022 through sustainable funding and use-of-proceeds loans.

In India, DBS Bank helps it with its expansion plan for its ethanol distillation capacity and the blending of ethanol with petrol. DBS also became the first foreign bank in the country to offer a transition loan of 1,750 million rupees to a leading sugar and renewable energy producer. By using the funds, the company could implement the company’s overall decarbonization plan, leading to the expansion of its sustainable bioethanol business in the industry.

Besides, DBS is also instrumental in developing Climate Impact X (CIX), an international marketplace for the trade and exchange of premium carbon credits, in partnership with Temasek, Standard Chartered, and Singapore Exchange.

By using the most advanced innovations in sustainability, businesses can invest in more environmentally friendly products and services, which will help accelerate Singapore’s economic transition to achieve net-zero emissions.