Latest news with #HelgeMuenkel
Business Times
2 days ago
- Business
- Business Times
Transition finance: Where business meets green growth
RISING heat, floods and food price shocks – these are not distant concerns, but the everyday realities of climate change confronting people globally. This is especially so in Asia, which has some of the most climate-vulnerable communities in the world. The tension between delivering inclusive growth to improve people's lives and protecting the environment to ensure future generations' needs can be met is at the heart of Asia's climate paradox. It is also why transition finance – aimed at enabling decarbonisation in high-emitting sectors – is gaining ground as an investment theme. 'Unlike green finance, which focuses on projects that are already climate-friendly, transition finance enables step-by-step change,' says Helge Muenkel, chief sustainability officer at DBS. 'It supports the rewiring of systems, including those that aren't green yet – but can become greener over time.' Importantly, transition financing is a tool not just for decarbonisation, but for broader business transformation. And it also drives climate adaptation outcomes – helping businesses and communities build resilience as they transition, Muenkel added. ' Unlike green finance, which focuses on projects that are already climate-friendly, transition finance enables step-by-step change. ' — Helge Muenkel, chief sustainability officer, DBS One key application for transition finance is in the power sector, including coal-fired power which is responsible for around 20 per cent of global greenhouse gas emissions, making it the single largest source of emissions globally. There are about 5,000 operational coal-fired power plants in Asia, many of which are still relatively young, with years or even decades left in their operating life. A recent study by Global Energy Monitor shows that by the 2040s, the average age of a coal power plant in South-east Asia will be about 28 years. This figure varies by country; for example, the average age of a coal plant in Thailand will be 39 years, in Indonesia 27 years, and in the Philippines 28 years. New coal capacity is also being added, with Asean countries currently having close to 30 gigawatts of coal capacity in various stages of development. This presents a complex challenge. 'Decarbonising the power sector is not about flipping a switch overnight,' Muenkel says. 'We are running an ultra-marathon, not a sprint. But we do need to act with urgency – and finance plays a vital role.' A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up Helge Muenkel, chief sustainability officer at DBS. PHOTO: DBS Since 2021, DBS has reduced its thermal coal exposure by more than half from $2.7 billion to $1.3 billion in 2024. Shilpa Gulrajani, head of sustainable finance at DBS' Institutional Banking Group, explains: 'Reducing emissions is essential. But for many countries, energy security and affordability remain pressing concerns. Solutions must be grounded in local realities and balance environmental, social and economic priorities.' Therefore, instead of abrupt shutdowns of critical infrastructure, a more pragmatic approach involves managed coal phase-outs, including the planned early shutdown of coal-fired power plants in the region. DBS co-leads a working group in the Monetary Authority of Singapore-convened Transition Credits Coalition (Traction), which aims to support the early and managed phaseout of thermal coal power plants across the region by helping to create a new financial tool: high integrity transition credits. Natural gas continues to play a role in South-east Asia's energy mix as a transitional energy source to support the phaseout of coal and expansion of renewables and energy storage that are not yet a commercially viable option in specific parts of Asia. This applies to the extent that stringent environmental safeguards are met – including robust methane leakage mitigation. This approach supports a responsible, time-bound pathway from coal, while laying the groundwork for longer-term decarbonisation. Catalysing real-world change Transition finance is also about supporting real economy hard-to-abate sectors like steel, cement and aviation – integral to economic development but among the most challenging to decarbonise – as they retool operations, upgrade technology and adapt to a low-carbon future. This includes supporting the scale up of 'enabling activities' – projects that may not directly reduce emissions but play a critical role in facilitating wider decarbonisation in a value chain. For instance, supplying low-carbon materials to electric vehicle producers or providing storage solutions for renewables can accelerate the transition across entire value chains. ' For many countries, energy security and affordability remain pressing concerns. Solutions must be grounded in local realities and balance environmental, social and economic priorities. ' — Shilpa Gulrajani, head of sustainable finance, DBS' Institutional Banking Group. In 2025, DBS enhanced its Transition Finance Framework (TFF), materially increasing the number of activities the bank will support. The new TFF also provides for robust governance and transparency for assessing such opportunities. The framework provides greater clarity to clients and stakeholders on eligible transition financing activities, and helps unlock capital for sectors that need to decarbonise but fall outside of conventional green taxonomies. 'This transformation requires financing solutions for activities that often fall outside of existing taxonomies,' says Gulrajani. 'We strengthened our framework to give clients and the broader industry clearer guidance on what a credible transition in Asia can look like, even as global standards evolve.' The enhanced TFF leverages the bank's deep industry knowledge, combined with the sustainable finance team's transition expertise, to help clients better manage risks and identify opportunities amid their decarbonisation journey. In addition, the framework also sets expectations on transition plans and available financial products, supporting a more structured and transparent transition financing ecosystem across the region. 'We work closely with clients to ensure their transition plans and timelines are both pragmatic and rigorous, and that capital is deployed where it can drive real decarbonisation.' As financial institutions ramp up support for transition financing, an increase in their financed emissions in the near term is to be expected. This rise reflects the practical realities of enabling real-economy shifts, especially in hard-to-abate sectors where emissions reductions take time, says Gulrajani. It is also a signal that capital is being directed where it is most needed to achieve long-term transformation. 'At DBS, we are willing to take on this risk because we believe it is a necessary part of enabling the transition,' she adds. The future of transition finance Shilpa Gulrajani, head of sustainable finance at DBS' Institutional Banking Group. PHOTO: DBS According to DBS, transition finance is still in its early stages in Asia, but momentum is building. As one of the region's earliest movers, the bank has developed internal frameworks, supported industry partnerships and pioneered innovative financial instruments to accelerate change. DBS has also been co-leading the transition finance working group of the Singapore Sustainable Finance Association, which aims to position Singapore as a regional transition finance hub. 'We are helping create a broader ecosystem where capital, policy and innovation come together,' says Muenkel. 'Asia has the innovation, talent and the impetus to act. With the right collaboration, we can lead the world in this journey.' Complexities in the global landscape have raised questions on whether sustainability can continue delivering both impact and returns. Still, climate change continues and for DBS, the answer is clear. 'Notwithstanding recent geopolitical developments affecting sustainability globally, climate change will further accelerate, affecting the communities we operate in, and needs action,' says Muenkel. 'DBS aims to be the best bank for a better world – and that means staying the course even in challenging times. We are here for the long haul.' Find out more about the DBS Transition Finance Framework .
Business Times
2 days ago
- Business
- Business Times
Overcoming challenges in sustainable finance
Helge Muenkel, chief sustainability officer, DBS Helge Muenkel, DBS chief sustainability officer PHOTO: DBS Victor Wong, head of sustainability office, UOB Asset Management Victor Wong, head of sustainability office, UOB Asset Management PHOTO: UOB Mike Ng, group chief sustainability officer, OCBC Mike Ng, group chief sustainability officer, OCBC PHOTO: OCBC BT: Sustainable investing has ebbed and flowed along with market sentiment and political winds. Why are investors hesitant, and what needs to be done to get climate-aware investing into the mainstream? Helge Muenkel: We have witnessed continuous improvement and strong efforts to transition our global economies to a net-zero future. According to the International Energy Agency, last year's global investments in clean energy were around double the amount going into fossil fuels. Ten years ago, fossil fuel investments were about 20 per cent larger than clean energy investments. Meanwhile, India is projected to achieve a major milestone in 2025, with renewable electricity providing for more than half of the country's power capacity, while China added more renewable power capacity in 2024 than the rest of the world combined. Notwithstanding this, current investment flows are still insufficient to allow us to meet the goal of the Paris Agreement. Furthermore, complexities in the macroeconomic and geopolitical landscape have understandably made investors more cautious in recent times. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up Importantly, sustainable investing is not a short-term but a structural trend. Climate risk is increasingly recognised as a major driver of financial risk. And hence, most major investors integrate environmental, social and governance (ESG) considerations into their overall decision process. Encouragingly, Asian regulators are stepping up. Across the region, many policies and regulations have been put in place that create an enabling environment, which supports climate action and related financing flows. This includes green and transition taxonomies and ESG disclosure standards. These developments bolster investor confidence and embed greater transparency in sustainable investing – important steps in shifting these financing flows into the mainstream. More work needs to be done. For instance, there is some ambiguity around what qualifies as transition and transition finance. The vast majority of assets and economic activities globally and in Asia are not yet green, and DBS believes it is critical to also allocate capital to support their transition to becoming greener. Beyond financing those assets and activities, transition finance can also help companies transform their entire businesses, all of which will contribute to the greening of the entire economy. We see progress across the region on several fronts. Localised taxonomies are evolving to reflect regional contexts and developmental needs. Markets like Singapore are evolving disclosure rules and incentives for credible transition finance. At DBS, we have observed growing sophistication in how capital is being deployed. For instance, we saw strong investor appetite for two green bonds DBS brought to the market recently. The first was the issuance of Equinix's S$500 million green bond in March 2025, its first Singapore dollar issuance. The second was Asia's first public sustainability-linked securities offering by ST Telemedia Global Data Centres in January 2024. Both bonds were meaningfully oversubscribed, signalling growing investor demand for credible climate instruments. Victor Wong: Investors' hesitation around sustainable or climate-aware investing, despite growing interest, often stems from structural challenges and other key concerns. For example, the lack of standardisation and transparency in how ESG factors are assessed and reported. Without consistent metrics, it becomes difficult for investors to compare ESG investment products and evaluate their true impact. Additionally, some investors are concerned that corporates and governments may scale back their climate commitments which affect the short-term viability of such investments. At UOB Asset Management, we view ESG integration as a strategic tool for value creation and risk mitigation. By embedding ESG considerations into our investment process, we aim to support long-term sustainability for our investees and their businesses. We also recognise that some investors may wish to explore and capitalise on advanced strategies to achieve specific impact or invest in specific themes. To meet these needs, we make ESG a core element of our investment thesis, aligning our strategies with both market realities and investor aspirations. Mike Ng: One of the key considerations for investors when it comes to their investment decisions is the potential return. The recent increased geopolitical uncertainty and evolving regulatory landscape have tested investors' appetite to commit to sustainable investments since they are unsure about the future regulatory environment and the impact it may have on their investment returns. In addition, some investors may be hesitant given concerns about low-quality ESG data, greenwashing as well as the perceived trade-off between sustainability and returns. While interest in sustainable investment may fluctuate from time to time due to market sentiments and the geopolitical context, we believe that the overarching trend towards investments that take ESG factors and risks into consideration is here to stay. The challenges of sustainable investment are also being actively addressed. Collaboration between stakeholders – asset managers, data providers and regulatory bodies – is paving the way for more standardisation in reporting frameworks and taxonomies, which will help mitigate concerns on data quality and greenwashing. Meanwhile, leading financial institutions are developing diverse and accessible products catering to varying preferences and risks appetites, and – over time – are also showing that sustainable investments can deliver required returns. Sometimes, enabling investors with information can also make a big difference in mainstreaming sustainable investing. Take, for example, the OCBC Sustainability Hub, launched in 2024. The innovative platform empowers investors with a personal ESG rating, enabling them to track, understand and act on their investments, and to make informed financial decisions. Within just six months of its launch, the Sustainability Hub achieved a 2.3x year-on-year increase in sustainability-themed investments. BT: What do you see as the most promising areas of investments for corporates and individuals that will address climate risks and reap a return? Helge Muenkel: The business case for climate-aligned investing remains robust particularly in Asia, where climate risk is acute, economic growth is rapid, and the green transition is gaining momentum. We see strong opportunities emerging across several areas that offer both meaningful climate impact and attractive risk-adjusted returns. One such area is energy. Investments in solar, wind and battery storage systems are increasingly competitive against fossil fuel alternatives. More importantly, enablers such as smart grids and demand management technologies – especially in high-growth urban centres – are essential to stabilising renewable energy supply and unlocking further scale. Mobility is another sector where climate action meets opportunity. Across Asia, countries are racing ahead in electric vehicle (EV) manufacturing, charging infrastructure and intelligent traffic systems. Innovations such as ultra-fast charging and connected transport systems are also improving convenience and range, spurring consumer adoption. Investors are increasingly focused on mobility platforms, EV supply chains and battery recycling, all of which present strong growth prospects as urbanisation and climate pressure reshape how people and goods move across the region. In the agriculture sector, South-east Asia's role as a major rice producer makes agricultural adaptation a top priority. Agri-tech innovations and advanced water management systems can boost food security while safeguarding millions of livelihoods. With strong social returns, such investments are increasingly attracting private capital, from agribusinesses investing in resilient seeds to impact investors funding water-saving irrigation technologies. Another high-impact, cost-effective climate adaptation strategy is investing in nature-based solutions. Restoring and protecting ecosystems such as mangroves, wetlands, coral reefs and forests provides 'natural infrastructure' that reduces disaster risks, regulates water flows, buffers heat and sequesters carbon. For instance, mangrove restoration in Vietnam and the Philippines has proven effective in shielding coastal communities from storm surges. These solutions are relatively low-cost compared to traditional infrastructure such as concrete sea walls. We are also seeing transition finance emerge as an investment theme, which is why we enhanced our Transition Finance Framework in 2025 – to provide clients and stakeholders with greater clarity and transparency on eligible transition financing activities and enhance access to the financial resources required to accelerate climate action. This creates confidence not just for the bank but also for other ecosystem players. Victor Wong: Renewable energy sources such as solar and wind continue to gain traction as demand for clean power grows. Promising investment areas that address climate risks while delivering returns include: Transmission infrastructure, such as grid transmission, as renewable energy sources are often located far from demand centres. Globally, these projects are backed by governments – particularly in Europe and parts of Asia – to build new transmission lines. Battery storage and smart grid technologies, which are critical to ensuring the reliability and efficiency of renewable energy systems. Green data centres, driven by the rise of artificial intelligence (AI) and cloud computing, which is increasing demand for high-performance, energy-efficient infrastructure. Sustainability goals, technological innovation, commitments from hyperscalers such as Microsoft and Meta to achieve carbon neutrality, and government incentives for low-emission facilities further strengthen the investment case. Mike Ng: In its 2025 Supertrends Report, the Chief Investment Office at our private banking subsidiary, Bank of Singapore, stated its view that the power-hungry nature of technology and the energy transition will accelerate over the medium term. This will be fuelled by the proliferation of AI use cases and the accelerating demand growth for electricity over the long term, driven by developments in the clean energy transition, electric mobility, cooling, data centres and AI sectors. As improvements in energy efficiencies of data centres, cooling and power systems infrastructure will be required, the search for cleaner energy sources including solar, wind and nuclear technologies to supplement existing energy sources will present investment opportunities. While the US has sidelined the green agenda for now, the global shift towards clean energy remains crucial for humanity's long-term survival and offers substantial economic and investment prospects. According to a World Economic Forum White Paper from 2023, an estimated additional US$4.3 trillion in revenue and 232 million new jobs could be created in Asia by 2030 due to climate adaptation and mitigation initiatives. We see opportunities in companies with exposure to clean energy and EVs, as well as transition enablers focused on smart grid infrastructure, energy storage and efficiency, and producers of metals and minerals. Policy shifts have also enabled the oil and gas industry to be part of the energy transition, by leveraging technology – bioenergy and carbon capture – and the ability to manage complex energy systems. From a geographical perspective, China in particular has emerged as a green industry powerhouse. The country added 373 gigawatts of renewable energy capacity in the past year and now accounts for over 70 per cent of global EV production. In 2024 alone, it exported nearly 1.25 million electric cars. BT: Plugging the funding gap to mitigate climate risks is even more challenging today amid economic uncertainty and geopolitical tensions. What do you see as the most promising sources of capital that remain relatively untapped, and how can corporates help? Helge Muenkel: Despite the positive momentum described earlier, the financing gap for climate action in Asia remains daunting. DBS estimates that over the next decade, the region will require approximately US$2.2 trillion for mitigation, US$2.5 trillion for adaptation, and a further 10 per cent of that total for resilience-related investments. In comparison, climate finance flows to South-east Asia from 2018 to 2019 totalled just US$27.8 billion annually. Even if this were to increase to US$50 billion annually, the shortfall over 10 years would still exceed US$4 trillion. While the scale of capital needed is immense, it is not necessarily capital availability that is the issue – rather, it is the lack of risk-adjusted returns that remain attractive enough to mobilise capital at scale. The priority must be on designing financing structures that shift the risk-return profile in favour of scalable investments. This is where policy and regulatory frameworks become essential. Policymakers and regulators can create enabling environments through measures such as regulatory clarity on transition plans and incentives for green investments – which can reduce uncertainty and improve the bankability of climate projects. At the same time, financial innovation plays a pivotal role in unlocking new capital at a larger scale, such as concessionary and philanthropic capital. Structures like blended finance are particularly promising. They can de-risk early-stage projects, helping to crowd in commercial capital. For example, DBS inked a loan agreement alongside Karian Water Services, Export-Import Bank of Korea, the Asian Development Bank and the International Finance Corporation. The loan went towards the development of a regional water supply system to deliver fresh water to around two million people across Jakarta, Tangerang and South Tangerang, marking the first blended finance transaction in the water sector in Indonesia. We are also seeing the potential of transition credits to support decarbonisation pathways in hard-to-abate sectors. DBS co-leads a working group under the Transition Credits Coalition convened by the Monetary Authority of Singapore (MAS). It seeks to catalyse the creation of high-integrity, transition-related carbon credits. A core focus is to support the early and managed phaseout of thermal coal power across Asia, paving the way for credible, just-transition pathways – particularly in industrial and emissions-intensive sectors. Victor Wong: As both major asset holders and stakeholders in climate risk, insurers are well-positioned to play a dual role: investing in resilience infrastructure and integrating climate risks into underwriting and asset management. These areas remain relatively untapped, presenting a significant opportunity for impact. Corporates also have a critical role to play. They can issue green and sustainability-linked bonds to fund climate-related activities, embed sustainability into procurement as corporates can stimulate demand for low-carbon goods and services – thereby indirectly channelling capital into green innovation – and engage in transparent reporting aligned with international frameworks. These actions can help build investor confidence and attract ESG-focused capital. A good example within Asean is Indonesia, where the funding gap for climate action is particularly prominent. To decarbonise its energy and transportation sectors, Indonesia requires an average investment of US$9.1 billion annually from 2018 to 2030. Under its national plan, the government allocated US$2.1 billion annually from 2020 to 2024, leaving a significant annual shortfall of US$7 billion. This highlights the potential of private financing in advancing climate action. Corporates – especially national banks in Indonesia – can play a key role in mobilising private financing, as fossil fuels continue to receive a bigger share of private investment compared to renewable energy. Mike Ng: There is ample liquidity in the system. Banks are still committed to financing green and transition projects and technologies. One often-cited problem lies in the bankability of such projects is the ability to generate enough cashflow to make it suitable for financing or to attract investors. Central to the issue of bankability is risk allocation; allocating specific risks to the party most capable of managing and mitigating them is critical. For instance, in a utility project, having the project offtaker (often a state-owned utility company) take on regulatory risks or manage market demand risks by establishing long-term take-or-pay offtake agreements is one avenue for risk allocation. Another problem contributing to the climate finance gap is the high cost of adoption. If the cost of a new green solution is several times that of a fossil fuel-based solution, it simply does not make economic sense for companies to adopt it. To overcome this, governments can consider implementing subsidies and regulations that lower the cost of adoption and stimulate demand in the process. When supply grows along with demand, the cost curves associated with the new technology come down. When the technology becomes economically viable, the financing gap naturally narrows. Besides tapping traditional financing for climate finance, there are other funding mechanisms to consider. One is blended finance. Traditionally, blended finance structures have been deployed at the project level, with each individual project attracting capital from different providers including multilateral agencies, development finance institutions, export credit agencies, banks and others. As each project has its own risk profile and characteristics, deployment of blended finance at the project level tends to be bespoke and time-consuming, making scalability a challenge. To achieve scalability, blended finance structures can be deployed at the fund level which combines capital from multiple stakeholders with different risk-return requirements but with common impact objectives into a single investment scheme. The fund in turn allocates capital to the individual projects. Funds have the flexibility to accommodate different risk-return profiles and objectives in the choice of capital providers and fund structure, as well as distribution waterfalls in the fund's documentation. Such flexibility enables the 'crowding in' of additional capital from commercial investors, achieving scalability to deliver outcomes in areas such as energy transition, climate mitigation, resilience and adaptation. An example is the MAS' Financing Asia's Transition Partnership initiative, which aims to use an initial injection of US$500 million by the Singapore Government to raise funding from other sources up to a projected US$5 billion. The goal is to finance green projects in Asia focused on accelerating the energy transition, ramping up green investments, and decarbonising emissions-intensive sectors such as cement and steel production. Another benefit of blended finance is the blending of knowledge and expertise. The diversity of the participants brings a wealth of knowledge which can be shared. For example, multilateral agencies could advise on governance structures, engage local policymakers in enhancing bankability of project documentation, or provide training on ESG standards. Fund managers bring with them the expertise to evaluate project risks and returns, and to structure the fund to cater to the different investor profiles. BT: How open is your organisation to investing catalytic capital for climate or transition purposes – where risk is higher and returns may be concessionary at best? Helge Muenkel: Catalytic capital has played a critical role as part of a tool kit of solutions to enable a just and orderly transition in Asia. As a bank, our approach is to leverage our industry knowledge, sustainability advisory and financial expertise as a structuring and equity and debt distribution partner that helps bring catalytic capital into the fold. We work closely with our clients and partners to structure solutions. We bring our sector teams and sustainable finance teams together to explore opportunities with our clients and offer well-informed solutions that manage risks and drive real impact. The transition journey is not linear, and it is not without trade-offs. But we believe deeply that by leaning in early and by helping shape the market, not just react to it – we can catalyse real-economy decarbonisation and unlock pathways that would otherwise remain out of reach. Victor Wong: Catalytic capital plays an important role in accelerating the transition to a low-carbon economy, particularly in areas where commercial capital may be more risk-adverse. While such investments may carry higher risks or concessionary returns, they can generate long-term value that aligns with the goals of long-term investors. At UOBAM, we recognise the importance of sustainability in investment decision-making. While we currently do not participate directly in catalytic capital structures, we continue to monitor developments in this space. Our primary responsibility remains delivering returns for our shareholders, but we also invest with purpose by incorporating ESG considerations into our investment analysis and decision-making processes. Embedding material ESG considerations into our fundamental investment thesis helps us identify long-term risks and opportunities. UOBAM is one of the few regional investment managers in Asia with a dedicated ESG investment team covering all internally-managed major asset classes. Our strong regional footprint allows us to identify global ESG trends and anticipate how they will shape markets in Singapore and across the Asean region. Mike Ng: Addressing climate change and supporting the transition to a sustainable economy is the cornerstone of OCBC's business strategy. We believe that by strategically allocating resources to innovative projects and initiatives, we can drive meaningful environmental impact and position ourselves to benefit in the long term. We see value in balancing our lending portfolio with investments that align with our sustainability goals and allow us to support our clients on their sustainability journeys in alternative ways. In alignment with these principles, OCBC has developed a Sustainability Investment Programme which aims to deploy capital into climate or transition-related projects in areas such as energy transition, sustainable food and water, and the circular economy. The programme enables our commercial clients with suitable projects to have access to an alternative funding source. We are actively seeking more opportunities and suitable projects to support in this space.
Business Times
2 days ago
- Business
- Business Times
Going green in a multi-polar world
BY HOW much has the world progressed in climate mitigation and abatement? A cursory look may be disheartening. 2024 was the hottest year on record; it was the first calendar year when temperatures rose by 1.55 degrees Celsius above pre-industrial level. At the same time, geopolitical crises drove demand for fossil fuels; economic uncertainty also cast doubt on climate pledges. In the US, Donald Trump's victory as president last November spurred anti-ESG (environmental, social, and governance) and anti-DEI (diversity, equity and inclusion) sentiment. Yet, symptomatic of a multi-polar world, there are signs of progress outside the US. China, for example, is making strides on several fronts – not only in terms of its peak carbon and neutrality targets but also in expansion of its national carbon market beyond power. Europe continues to progress, albeit at an uneven pace. In terms of the UN Sustainable Development Goals (SDGs), the European Union's pace of progress was more than two times lower in the period of 2020 to 2023, compared with 2016 to 2019. Still, the European Commission has identified sustainability as a driver of the region's competitiveness, particularly in energy transition. The Asia-Pacific is likewise 'significantly off track' in terms of SDGs, said the UN Economic and Social Commission for Asia and the Pacific in its 2023 progress report. The report cited 'alarming regression' in climate action (Goal 13), 'driven by the region's vulnerability to disasters and continued greenhouse gas (GHG) emissions, which account for half of global pollution'. Meanwhile, the global financing gap remains acute and growing. In a report, the Organisation for Economic Co-operation and Development reported that the annual amount of finance needed to fund efforts towards the SDGs in developing and emerging countries surged by 36 per cent from 2015 to 2022, due partly to climate change. But resources only grew by 22 per cent over that period. The annual financing gap has risen by 60 per cent from US$2.5 trillion to US$4 trillion. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up DBS chief sustainability officer Helge Muenkel, who is a panellist in this edition's roundtable, expects the region will require about US$2.2 trillion for mitigation, US$2.5 trillion for adaptation, and a further 10 per cent of that total for resilience-related investments over the next decade. But the amount in climate finance flows is a fraction of that. 'While the scale of capital needed is immense, it is not necessarily capital availability that is the issue – rather, it is the lack of risk-adjusted returns that are attractive enough to mobilise capital at scale. The priority must be on designing financing structures that shift the risk-return profile in favour of scalable investments.' This occurs at a time when the global sustainable fund universe, comprising global open-ended and exchange traded funds, saw record outflows in the first quarter according to Morningstar data, amid fresh geopolitical challenges and an intensifying backlash against ESG. As expected, the US accounted for the largest outflow of US$8.6 billion, marking 10 consecutive quarters of outflows. Europe, a stalwart in sustainable investing, suffered its first quarter of net outflows since 2018. Excluding China, the Asia ex-Japan region saw net inflows. Morningstar said Asia 'remains steady with a consistent climate focus'. Institutional investors, however, are a bright spot. The latest annual report of the Asia Investor Group on Climate Change (AIGCC) (State of Investor Climate Transition in Asia) found that more institutions are integrating climate into their investment processes, with a strong interest in accelerating climate solutions and transition finance. The group represents 230 of the region's largest asset owners and managers, who collectively manage more than US$100 trillion. AIGCC chief executive Rebecca Mikula-Wright said: 'With our most comprehensive analysis to date of Asia's most influential investors, the direction of travel is crystal clear: US$100 trillion of investor capital in Asia is ratcheting up their climate action plans and are looking for opportunities to invest. With markets in Asia highly exposed to physical climate risks and nature-related risks, we need to see more investor ambition in accounting for these risks in their portfolios as well as allocating capital to address them.' There is also good news in a recent 'Sustainable Signals' survey of individual investors by Morgan Stanley Institute of Sustainable Investing. It found that interest in sustainable investing remained strong and stable. More than half of those polled planned to invest more over the next year, citing increasing confidence that sustainable investments can offer market-rate returns.
Economic Times
09-05-2025
- Business
- Economic Times
Biggest polluters need ‘breathing space' to reform, DBS says
Live Events Major polluters need support to develop credible plans to curb emissions instead of being held to unrealistic demands for reforms, according to DBS Group Holdings Ltd., Southeast Asia's largest still accounts for almost half of total energy supply in the Asia-Pacific region, and sectors including shipping and steel-making continue to face challenges in decarbonizing quickly.'We need to give everyone a bit of breathing space to develop transition plans,' Helge Muenkel, the bank's chief sustainability officer, said in an interview on the sidelines of the Ecosperity Week conference in has previously warned that emissions tied to its customers could rise in the short-term. The trajectory will be impacted by its efforts to direct more funding to support the early retirement of coal power plants, and development of supply chains for critical minerals and other products required for green technology like electric in Europe are coming under new pressure to stand by strict climate commitments, and both Barclays Plc and Standard Chartered Plc will face calls from investors this week to accelerate lending to clean which lifted sustainable financing commitments to S$89 billion ($69 billion) at the end of 2024 from S$70 billion the previous year, will aim to hold customers to account over their transition efforts, Muenkel said in the Tuesday interview.'If customers after engagement don't give us a sense that they really want to move, then ultimately that's actually a concern,' Muenkel said. 'Then we need to discuss cutting lines, disbanding relationships.'The bank has chosen to remain a member of the Net-Zero Banking Alliance , the finance sector climate group that's been abandoned by Wall Street and a series of lenders across Asia.'We like collective action, we like platforms that foster collaboration,' he said. 'It has proven to be actually very helpful.'
Time of India
09-05-2025
- Business
- Time of India
Biggest polluters need ‘breathing space' to reform, DBS says
Major polluters need support to develop credible plans to curb emissions instead of being held to unrealistic demands for reforms, according to DBS Group Holdings Ltd., Southeast Asia's largest lender. #Operation Sindoor India-Pakistan Clash Live Updates| Missiles, shelling, and attacks — here's all that's happening Pakistani Air Force jet shot down in Pathankot by Indian Air Defence: Sources India on high alert: What's shut, who's on leave, and state-wise emergency measures Coal still accounts for almost half of total energy supply in the Asia-Pacific region, and sectors including shipping and steel-making continue to face challenges in decarbonizing quickly. 'We need to give everyone a bit of breathing space to develop transition plans,' Helge Muenkel, the bank's chief sustainability officer, said in an interview on the sidelines of the Ecosperity Week conference in Singapore. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like She Was Everyone's Dream Girl In 90's, This Is Her Recently Cash Roadster Undo DBS has previously warned that emissions tied to its customers could rise in the short-term. The trajectory will be impacted by its efforts to direct more funding to support the early retirement of coal power plants, and development of supply chains for critical minerals and other products required for green technology like electric vehicles. Banks in Europe are coming under new pressure to stand by strict climate commitments, and both Barclays Plc and Standard Chartered Plc will face calls from investors this week to accelerate lending to clean energy. Live Events DBS, which lifted sustainable financing commitments to S$89 billion ($69 billion) at the end of 2024 from S$70 billion the previous year, will aim to hold customers to account over their transition efforts, Muenkel said in the Tuesday interview. 'If customers after engagement don't give us a sense that they really want to move, then ultimately that's actually a concern,' Muenkel said. 'Then we need to discuss cutting lines, disbanding relationships.' The bank has chosen to remain a member of the Net-Zero Banking Alliance , the finance sector climate group that's been abandoned by Wall Street and a series of lenders across Asia. 'We like collective action, we like platforms that foster collaboration,' he said. 'It has proven to be actually very helpful.'
