Southeast Asia

SUSBA features an extensive assessment of banks in Southeast Asia.

National commitments and regulatory landscape

Indonesia

Climate change and sustainability commitments:

  • Committed to reduce GHG emissions by 26% by 2020 and 29% by 2030 (or 41% with international assistance).
  • The National Medium-Term Development Plan (RPJMN) 2020-2024 sets targets for:
    • Renewable energy development to fulfill national energy needs and reduce GHG emissions
    • Forest, marine and water conservation as well as enhanced safeguards on land use change
    • Climate- and disaster-resilient infrastructure development
  • The National Energy Policy, issued in 2014, aims to achieve at least a 23% share of renewable energy in primary energy supply by 2025.

Regulatory support for sustainable banking:

  • Bank Indonesia is a member of the Network for Greening the Financial System (NGFS).
  • The Code of Good Corporate Governance, published by the National Committee on Governance in 2006, provides guidelines for companies on awareness of environmental and social issues.
  • The Indonesian Law on Limited Liability Company No. 40 of 2007 dictates all listed companies to disclose how they implement their commitment to participate in sustainable economic development in their annual report.
  • The Roadmap for Sustainable Finance, launched by the Indonesian Financial Services Authority (OJK) in December 2014, outlines a medium- and long-term sustainable finance programme.
    • The OJK Regulation on Application of Sustainable Finance (NO.51/POJK.03/2017) mandates financial institutions to develop one-year and five-year sustainable finance action plans.
    • The OJK Regulation on the Issuance and Terms of Green Bond (NO.60/POJK.04/2017) regulates the issuance of and requirements for green bonds.
  • A series of voluntary guidelines facilitates the incorporation of relevant E&S safeguards into financial institutions' sector policies, such as palm oil, energy efficiency, and green building.

Sustainable finance industry platform:

  • The Indonesian Sustainable Finance Initiative, launched in 2018, promotes the adoption of sustainable finance practices and nature-based financing solutions by strengthening organizational capacity and facilitating dialogue between banks, regulators, investors, and other key stakeholders.

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Environmental & Social Sectors & Issues
Indonesia
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Malaysia

Climate change and sustainability commitments:

  • Committed to reduce GHG emissions intensity of GDP by 35% by 2030 (or 45% with international assistance). This includes achieving a 20% renewable energy capacity mix and 8% savings from energy efficiency by 2025.
  • 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, it 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.
  • Securities Commission Malaysia (SCM) launched a Sustainable and Responsible Investment (SRI) roadmap in November 2019, outlining strategies to expand the range of SRI instruments, issuers, investors and ancillary services, while strengthening disclosure and governance.

Regulatory support for sustainable banking:

  • BNM is a member of the Network for Greening the Financial System (NGFS).
  • The Green Technology Financing Scheme (GTFS), launched by Bank Negara Malaysia (BNM) in 2010 and extended as GTFS 2.0 until the end of 2020, incentivizes banks to finance green technology and products.
  • The Sustainability Reporting Guide and Sustainability Toolkits, introduced by Bursa Malaysia in 2015 and updated in February 2018, supports listed issuers in integrating sustainability into their organizations. It includes references to the SDGs and recommendations of the Task Force on Climate-related Financial Disclosure (TCFD).
  • BNM's Value-based Intermediation Financing and Investment Impact Assessment Framework Guidance Document (VBIAF), published in November 2019, outlines a framework for the establishment of a risk management system for financing and advisory activities that contribute to positive economic, environmental and social outcomes.
  • BNM released a Climate Change and Principle-based Taxonomy discussion paper for public consultation in December 2019. When finalized, the taxonomy will serve as a guide to identifying and classifying economic activities that could contribute to climate change objectives.
  • Among other SRI initiatives, SCM's SRI Sukuk Grant Scheme allows issuers to claim 90% of review costs associated with issuing a green sukuk.
  • The Malaysian Code on Corporate Governance, revised by SCM in 2017, promotes good corporate governance practices for listed firms.

Sustainable finance industry platform:

  • The Malaysian Sustainable Finance Initiative (MSFI) was established in July 2020 by Capital Markets Malaysia (CMM). This initiative will support capacity development for Malaysia's financial sector through workshops and training courses to foster greater understanding of ESG integration and sustainable financing solutions.
  • BNM convened the Joint Committee on Climate Change (JC3) in September 2019, which is intended to facilitate collaboration in enhancing the Malaysian financial sector's climate resilience.

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Environmental & Social Sectors & Issues
Malaysia
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Philippines

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".
  • The Philippine Development Plan 2017 - 2022 sets targets for forest cover, water quality, land degradation and disaster resilience.
  • The Philippine National Climate Change Action Plan (PNCCAP), released in 2011, prioritizes 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.
  • The Sustainable Energy Finance (SEF) Programme, launched in 2012, supports private banks through capacity building, technical evaluation and product development to catalyze the financing of energy efficiency and renewable energy projects.

Regulatory support for sustainable banking:

  • The Code of Corporate Governance, reviewed by the Securities and Exchange Commission (SEC) in 2016, provides recommendations on ESG disclosure, transparency and shareholder protection.
  • The Corporation Code of the Philippines, revised in 2018 by the SEC, covers some aspects of good corporate governance such as board nomination.
  • The SEC issued the Sustainability Reporting Guidelines for Publicly-Listed Companies (PLCs) in February 2019, to help PLCs assess, manage, and disclose their economic, environmental and social performance. This enables PLCs to monitor their contributions towards international sustainability targets such as the UN SDGs. The guidelines are based on internationally accepted reporting frameworks such as GRI and SASB.
  • In April 2020, the Bangko Sentral ng Pilipinas (BSP) issued its Sustainable Finance Framework, which sets expectations on the integration of sustainability principles, including environmental and social risk areas, into Philippine banks’ strategies, operations, governance and risk management systems.

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Environmental & Social Sectors & Issues
Philippines
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Singapore

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.
  • The Climate Action Plan, published by the National Climate Change Secretariat in 2016, outlines how Singapore will reduce GHG emissions and achieve energy efficiency targets.
  • Implemented a carbon tax at a rate of $5 per tonne of CO2 until 2023, with plans to increase the rate to $10-15 by 2030.
  • In 2019, the Monetary Authority of Singapore (MAS) announced the Green Finance Action Plan, a long-term strategy to make Singapore a green finance hub. The plan includes the creation of:
    • Environmental Risk Management Guidelines for banking, insurance, and asset management.
    • Green and sustainability-linked loan grant schemes.
    • A US$2 billion Green Investments Programme, with an initial US$100m placement in the Bank for International Settlements’ Green Bond Investment Pool.
    • Centres of Excellence to conduct Asia-focused climate research and training programmes.

Regulatory support for sustainable banking:

  • MAS is a founding member of the Network for Greening the Financial System (NGFS).
  • MAS issued three public consultation papers on the proposed Environmental Risk Management Guidelines for banks, insurers, and asset managers in June 2020. The Guidelines aim to enhance the financial sector’s resilience to environmental risk and strengthen its role in greening the economy in both Singapore and the region.
  • SGX-ST Listing Rules Practice Note 7.6 Sustainability Reporting Guide, introduced by Singapore Exchange (SGX) in 2016 for listed companies as a response to growing shareholders and investors expectations, encourages banks to be stakeholder-driven when developing policies.
  • The Association of Banks in Singapore (ABS) Guidelines on Responsible Financing, released in 2015 and updated in June 2018, define minimum standards around senior management commitment, governance and capacity building for member banks.
  • The Haze Prevention and Fire Risk Assessment toolkit was released in 2017 by ABS to guide banks in the assessment of their palm oil and pulp & paper clients' haze and fire management practices.
  • The Monetary Authority of Singapore (MAS) Green Bonds Scheme was launched in 2017 to offset the additional costs of issuing green bonds (i.e., third-party review).
  • The Code of Corporate Governance of Singapore, revised in August 2018 and with effect from 1 January 2019, put emphasis on the benefits of a well-governed company for a wide range of stakeholders beyond shareholders.

Sustainable finance industry platforms:

  • The Asia Sustainable Finance Initiative, launched in January 2019, 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.

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Environmental & Social Sectors & Issues
Singapore
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Thailand

Climate change and sustainability commitments:

  • Committed to reduce GHG emissions by 20% by 2030, compared to the projected business-as-usual level, or 25% with international assistance.
  • The Climate Change Master Plan (CCMP) 2015-2050 aims to 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.
  • The 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.

Regulatory support for sustainable banking:

  • The Bank of Thailand (BOT) is a member of the Network for Greening the Financial System (NGFS).
  • The Sustainable Banking Guidelines, issued by the Thai Bankers’ Association in 2019 and supported by the Association of International Banks, define the minimum standards for responsible lending practices for all banks operating in Thailand.
  • BOT is collaborating with the International Finance Corporation to develop a Sustainable Finance Policy Framework, which will include a roadmap and tools to support the Thai banking sector in improving ESG risk management practices.
  • The Stock Exchange Thailand (SET) Principles of Good Corporate Governance for Listed Companies, issued in 2012, recommends that the board should consider environmental and social issues associated with both direct and indirect operations.
  • The Guidelines for Sustainability Reporting, released by SET in 2012, provide further guidance on ESG reporting.
  • The 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".
  • SET developed a Sustainable Business Development Manual for listed companies in 2019, explaining the fundamentals of sustainable business while highlighting the importance of good corporate governance and ESG integration.
  • The Securities and Exchange Commission (SEC) Strategic Plan 2020 – 2022, announced in February 2020, aims to build a sustainable capital market in Thailand by promoting ESG integration, setting standards for ESG disclosures, and developing regulations and incentives for financial institutions to improve their sustainable offerings.

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Environmental & Social Sectors & Issues
Thailand
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Vietnam

Climate change and sustainability commitments:

  • Committed to reduce GHG emissions by 8% by 2030, (25% with international support).
  • The National Socio-Economic Development Strategy 2016-2020 sets national targets for sustainable development, environmental protection and natural resource conservation.
  • The National Climate Change Strategy 2011 sets objectives to develop a low-carbon economy, protect the global climate system and promote sustainable development.
  • The 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.

Regulatory support for sustainable banking:

  • The Directive 03/CT-NHNN on Promoting Green Credit Growth and Environmental and Social Risks Management in Credit Granting Activities was issued by the State Bank of Vietnam (SBV) in 2015, and serves as sustainable banking regulations for banks operating in Vietnam.
  • The Decision 1552/QD-NHNN on issuance of Action Plan of the banking sector to implement the National Strategy on Green Growth toward 2020, issued by SBV in 2015, details the role of the financial sector in supporting sustainable development in Vietnam.
  • The 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.
  • In August 2018, SBV issued Decision No.986/QD-TTg on the Development Strategy of Vietnam Banking Sector to 2025, with Orientations to 2030, with the aim to promote sustainable development, integrate green finance into banks' credit processes, and increase the proportion of renewable energy in banks' portfolios.

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Environmental & Social Sectors & Issues
Vietnam
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Assessed banks

The major publicly listed banks headquartered in each country were included to best represent the regional banking industry upon which most local businesses rely.

Flag of Indonesia

1. Indonesia

  • Bank Central Asia Tbk (BCA)
  • Bank Mandiri (Persero) Tbk (Mandiri)
  • Bank Negara Indonesia Tbk (BNI)
  • Bank Panin Tbk (Panin)
  • Bank Permata Tbk (Permata)
  • Bank Rakyat Indonesia Tbk (BRI)
  • PT Bank Muamalat Indonesia Tbk (Muamalat)
  • PT Bank Pembangunan Daerah Jawa Barat dan Banten Tbk (Bank BJB)
Flag of Malaysia

2. Malaysia

  • AMMB Holdings Berhad (Ambank)
  • CIMB Group Holdings Berhad (CIMB)
  • Hong Leong Bank Berhad (Hong Leong)
  • Malaysian Banking Berhad (Maybank)
  • Public Bank Berhad (Public Bank)
  • RHB Bank Berhad (RHB)
  • Bank Islam (BI)
  • Bank Rakyat (BR)
Flag of The Philippines

3. Philippines

  • BDO Unibank, Inc (BDO)
  • Bank of the Philippine Islands (BPI)
  • China Banking Corporation (CBC)
  • Metropolitan Bank & Trust Company (Metrobank)
  • Philippine National Bank (PNB)
  • Security Bank Corporation (SBC)
  • Rizal Commercial Banking Corporation (RCBC)
Flag of Singapore

4. Singapore

  • DBS Group Holdings Limited (DBS)
  • Oversea-Chinese Banking Corporation Limited (OCBC)
  • United Overseas Bank Limited (UOB)
Flag of Thailand

5. Thailand

  • Bangkok Bank (BBL)
  • Bank of Ayudhya (Krungsri)
  • Kasikorn Bank (KBank)
  • Krung Thai Bank (KTB)
  • Siam Commercial Bank (SCB)
  • Thanachart Bank (TBank)
  • TMB Bank (TMB)
Flag of Vietnam

6. Vietnam

  • Bank for Investment and Development of Vietnam (BIDV)
  • Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB)
  • Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank)
  • Vietnam Export-Import Commercial Joint Stock Bank (Eximbank)
  • Vietnam Prosperity Bank (VPBank)

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