Driving Sustainable Banking in ASEAN

SUSBA: An interactive tool for banks to assess and benchmark their Corporate Governance (CG) and Environmental, Social, Governance (ESG) integration performance to accelerate their efforts to stay competitive, resilient and relevant in a resource constrained, low carbon future.

Sustainability commitments and regulatory landscape across six ASEAN countries

Indonesia

National climate change and sustainability commitments:

  • Committed to reduce GHG emissions by 26% by 2020 and 29% by 2030, or 41% by 2030 with international assistance.
  • The National Medium Term Development Plan (RPJMN) 2015-2019 sets national targets for water security, GHG emissions reduction and forest and marine conservation.
  • National Energy Policy, issued in 2014, targets an increase of renewable energy to 23% of primary energy supply by 2025.

Supporting regulatory framework pertaining to sustainable banking

  • Code of Good Corporate Governance, published by the National Committee on Governance of Indonesia in 2006, provides guidelines for companies on awareness of environmental and social issues.
  • Indonesian Law on Limited Liability Company No. 40 of 2007 dictates all listed companies to disclose how they implement the commitment to participate in sustainable economic development in their annual report.
  • Roadmap for Sustainable Finance, launched by the Indonesian Financial Services Authority (OJK) in 2015, outlines the rollout of a comprehensive medium and long term sustainable finance programme.
    • NO.51/POJK.03/2017: Mandates financial institutions to develop short and medium term sustainable finance action plans.
    • NO.60/POJK.04/2017: Regulation on the issuance and requirements on green bonds.
  • Guidelines for Sustainable Palm Oil Financing, developed by OJK in collaboration with WWF in 2017, facilitates financial service institutions (FSIs) in incorporating relevant E&S safeguards into their palm oil sector policies.

Sustainable Finance industry platform:

  • Indonesian Sustainable Finance Initiative, launched in 2018, aims to promote and implement inclusive sustainable finance practices in Indonesia through the strengthening of organisational capacity.

Malaysia

National climate change and sustainability commitments:

  • Committed to reduce GHG emissions intensity of GDP by 35% by 2030, or 45% by 2030 with international assistance.
  • The 11th Malaysian Plan (11MP) 2016-2020 aims for Malaysia to become an advanced economy through a "resilient, low-carbon, resource-efficient and socially inclusive" route and is also used as a roadmap for achieving the emissions intensity reduction target.
  • New Economic Model (NEM), introduced in 2010, is an important part of the government's 2020 vision of transforming the country into a high-income economy, with sustainability forming one of the core goals.

Supporting regulatory framework pertaining to sustainable banking

  • The Green Technology Financing Scheme, launched by Bank Negara Malaysia (BNM) in 2010, incentivizes banks to finance green technology by guaranteeing a portion of loans made by financial institutions to qualifying companies and projects.
  • The Sustainability Reporting Guide and Sustainability Toolkits, introduced by Bursa Malaysia in 2015, supports listed issuers in integrating sustainability into their organizations.
  • Malaysian Code on Corporate Governance, revised by Securities Commission Malaysia in 2017, promotes good corporate governance practices for listed firms.
  • Malaysia Securities Commission introduced a scheme in 2018 for issuers to claim review costs associated with issuing a green sukuk.
  • BNM's Value-Based Intermediation, launched in 2017, aims to improve the contribution of Islamic banks to positive economic, environmental and social outcomes with an E&S impact assessment framework and scorecard.

Philippines

National climate change and sustainability commitments:

  • Committed to reduce GHG emissions by 70% by 2030 in comparison to a business-as-usual scenario conditional on "the extent of financial resources, including technology development & transfer, and capacity building, that will be made available to the Philippines".
  • Philippine Development Plan 2017 - 2022 sets targets for forest cover, water quality, land degradation and disaster resilience.
  • Philippine National Climate Change Action Plan (PNCCAP), released in 2011, prioritises the mitigation of key E&S risks such as food and water stress, ecosystem and environmental degradation and fossil fuel dependency as the strategic direction for 2011 to 2028.

Supporting regulatory framework pertaining to sustainable banking

  • Sustainable Energy Finance (SEF) Programme, launched in 2012, supports private banks through capacity building, technical evaluation and product development.
  • Code of Corporate Governance, reviewed by the Securities and Exchange Commissions (SEC) in 2016, provides recommendations on ESG disclosure, transparency and shareholder protection.
  • Corporation Code of the Philippines, under revision in 2018 by SEC, covers some aspects of good corporate governance such as board nomination.

Singapore

National climate change and sustainability commitments:

  • Committed to reduce GHG emissions intensity by 36% from 2005 levels by 2030.
  • The Sustainable Singapore Blueprint, developed by MEWR and the Ministry of National Development in 2015, aims to develop a leading green economy and create a more liveable and sustainable city.
  • Climate Action Plan, published by the National Climate Change Secretariat in 2016, outlines how Singapore will reduce GHG emissions and achieve energy efficiency targets.

Supporting regulatory framework pertaining to sustainable banking

  • SGX-ST Listing Rules Practice Note 7.6 Sustainability Reporting Guide introduced by Singapore Exchange (SGX) in 2016 encourages banks to be stakeholder-driven when developing policies.
  • Association of Banks in Singapore (ABS) Guidelines on Responsible Financing, released in 2015 and updated in June 2018, define minimum standards on responsible financing for member banks.
  • Haze Prevention and Fire Risk Assessment toolkit for banks, released in 2017.
  • Monetary Authority of Singapore (MAS) Green Bonds Scheme, launched in 2017, offsets the costs of issuing green bonds.
  • Code of Corporate Governance of Singapore, revised in 2018, with effect from 1 January 2019, will have an increased focus on stakeholders beyond shareholders.

Sustainable Finance industry platforms:

  • Asia Sustainable Finance Initiative, announced in 2018, is a multi-stakeholder initiative that aims to harness and amplify the power of the financial sector to create resilient, climate smart, and resource efficient economies.

Thailand

National climate change and sustainability commitments:

  • Committed to reduce GHG emissions by 20% by 2030, compared to the 2010 projected business-as-usual level, or 25% with international assistance.
  • Climate Change Master Plan (CCMP) 2015-2050 aims achieve sustainable low carbon growth and climate change resilience by 2050.
  • The Twelfth National Economic and Social Development Plan 2017-2021 released in 2017 aims to preserve and restore natural resources and environmental quality in order to support green growth.
  • Sufficiency Economy Philosophy (SEP) espouses "moderation, appropriate technology, careful risk management, and flexibility" and mentions green financing as a tool to support the SEP and the SDGs.

Supporting regulatory framework pertaining to sustainable banking

  • Stock Exchange Thailand (SET) Principles of Good Corporate Governance for Listed Companies 2012 recommends that the board should consider environmental and social issues from both direct and indirect operations.
  • Guidelines for Sustainability Reporting released by SET in 2012 to provide further guidance on ESG reporting.
  • Corporate Governance Code for listed companies, revised in 2017, encourages the board to "comprehensively apply the CG Code to the company’s business in the interest of long-term sustainable value creation".

Vietnam

National climate change and sustainability commitments:

  • Committed to reduce GHG emissions by 8% by 2030, and 25% by 2030 with international support.
  • National Socio-Economic Development Strategy 2016-2020 sets national targets for sustainable development, environmental protection and natural resource conservation.
  • National Climate Change Strategy 2011 sets objectives to develop a low-carbon economy, protect the global climate system and promote sustainable development.
  • Green Growth Action Plan for 2014-2020 prescribes actions to be taken to guide the country towards green growth including active collaboration with the financial sector.

Supporting regulatory framework pertaining to sustainable banking

  • Directive 03/CT-NHNN on Promoting Green Credit Growth and Environmental and Social Risks Management in Credit Granting Activities issued by The State Bank of Vietnam (SBV) in 2015.
  • Decision 1552/QD-NHNN on the issuance of action plan of the banking sector to implement the National Strategy on Green Growth toward 2020 issued by SBV in 2015
  • Decree No. 71/2017/ND-CP, issued by the Government of Vietnam, in 2017, is a set of guidelines on corporate governance for public companies.
  • Sector-specific environmental and social checklists, issued by SBV in 2018, provide specific guidance to banks in managing E&S risks in ten high-risk sectors.
View assessments for Vietnamese banks Or view ASEAN country averages
Vietnam
© TONKIN PHOTOGRAPHY / WWF INTERNATIONAL

SUSBA: Connecting research to action

Assess 34 banks' performance on CG and ESG. Use the results to inform decision-making within governments and financial institutions to drive sustainable banking in ASEAN.
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Understand

Access a comprehensive overview of bank disclosures against 11 ESG integration and 11 CG indicators.

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Build bespoke assessment outputs that compare selected indicators across banks and countries or compare custom list of banks.

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