DBS targets zero thermal exposure by 2039

DBS will cease onboarding new clients who derive more than 25% of their revenue from thermal coal.

DBS has committed to zero thermal exposure by 2039, reportedly making it the first Singapore bank to commit to doing so, according to a press release.

To achieve this goal, DBS plans to cease onboarding new customers who derive more than 25% of their revenue from thermal coal, effective immediately. It will also lower the threshold as time progresses.

DBS will also stop financing customers who derive more than 50% of revenue from thermal coal beginning January 2026, except for their non-thermal coal or renewable energy activities. Similar to the first plan, the bank will lower the threshold in later years.

The bank also plans to leverage its Sustainable and Transition Finance Framework  to achieve meaningful decarbonisation in sectors which remain reliant on thermal coal. Under this framework, the bank will conduct engagements with customers to establish their transition strategies, and to help them incorporate greenhouse gas reduction targets in all applicable sustainability linked loan structures.

DBS shared that it will also disclose its thermal coal exposure annually in its sustainability report for transparency.

“To spur the development of renewables, we have upped the ante on financing projects by leading energy players in the region with the aim to scale the reach and supply of renewable energy in the near future,” said Tan Su Shan, Group Head of Institutional Banking, DBS Bank. “I believe that our commitments will result in substantial impact in the years to come.”

DBS has progressively refined its coal commitments to tackle climate change over the last few years. In February 2018, the bank restricted financing to only coal-fired power projects which adopt more advanced technologies that emit lower carbon emissions, and to stop financing new thermal coal mining projects.

This was followed by a blanket cease in financing any new coal power assets in April 2019.