Net Zero Commitment
The global call for stronger and coordinated climate action is getting louder and more urgent. Increasingly, countries and companies are pledging their commitment to net zero emissions, and are setting measurable goals and planning tangible actions to support the global transition. We cannot pass the responsibility to future generations; we must address the transition with urgency today.
UOBI, as a subsidiary of UOB which aspires to be a leading sustainable bank in Southeast Asia and is committed to net zero by 2050, recognises the substantial impact that financial institutions can have in catalysing and facilitating decarbonisation, and seek to balance growth with responsibility through supporting a just transition.
Our net zero commitment covers six focus sectors that represent about 60% of our corporate lending portfolio. These can be grouped into two ecosystems in terms of their emissions: energy and the built environment.
UOB’s considerations for prioritizing sectors:
- Significance
The six sectors are among the most material and interconnected in terms of decarbonisation efforts. Oil, gas and coal, for example, are responsible for more than 73% of direct emissions globally as the base supply of energy. End-users, including power, automotive, real estate and steel, account for more than 60% of the emissions from burning fossil fuels.
- Exposure and impact
The six sectors make up the majority of our corporate lending portfolio. UOB’s financing strategy can have near-term impact on the power and automotive sectors, where low-carbon technology is viable but requires substantial investment, as well as in the real estate sector where energy-efficient infrastructure is also available. Although emissions in the steel and construction sectors will be more difficult to abate, the transition in these sectors is essential for our real estate clients in their decarbonisation efforts.
- Accessibility and availability of methodology and data
Challenges surround data quality and availability, and we have chosen sectors in which meaningful emissions data is accessible or where there is an established data methodology for calculating estimates. Our methodology and sector coverage will be updated as data quality improves.
UOB has adopted a pragmatic view and our commitments are grounded in the realities of Indonesian market development.
We are guided by credible scientific approaches in setting our net zero targets, aligning with global net zero models where possible. This approach is in line with the guidance from the Glasgow Financial Alliance for Net Zero (GFANZ) on how financial institutions should set targets and use sectoral pathways in alignment with the Paris Agreement and the 1.5°C global warming trajectory outlined by the Intergovernmental Panel on Climate Change.
UOBI will continue to deepen our understanding of our clients’ decarbonisation journeys, enhance our sustainable finance products including sector-specific solutions that serve end-to-end needs, and reinforce our ability to catalyse the transformation of ecosystems through advisory and solutions beyond banking.
Further information regarding UOB’s commitment to achieving net zero is available on https://www.uobgroup.com/assets/web-resources/sustainability/pdf/forging-our-net-zero-future-progress-report-2023.pdf
Forging our net zero future
Read more about our commitment, approach and methodology on target setting.
Download our report and presentation
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