UOB commits to 2050 net zero targets to support a just transition for ASEAN
Kuala Lumpur, Malaysia, 7 November 2022 – UOB today announced ambitious commitments to reach net zero by 2050. This underlines its goal to support a just transition that advances sustainable socioeconomic development in tandem with decarbonisation in Southeast Asia.
UOB’s commitments cover six sectors, which make up about 60 per cent of its corporate lending portfolio. These six sectors are power, automotive, oil and gas, which are part of the energy value chain, as well as real estate, construction and steel, which are part of the built environment value chain.
Using internationally-recognised climate science models, UOB based its sectoral targets on regional pathways that align with global net zero goals. This approach to net zero reflects UOB’s strong belief in the need for a just transition in Southeast Asia that continues to support economic growth and improve energy access across the region’s diverse economies.
Mr Wee Ee Cheong, Deputy Chairman and Chief Executive Officer, UOB, said, “In Southeast Asia, our net zero ambitions must go hand in hand with an orderly and just transition to take into account socioeconomic challenges. Even as we cut our carbon footprint, we must ensure that people’s lives and livelihoods can continue to improve.
“It is important to balance growth with responsibility on our net zero journey. Our targets are ambitious, yet realistic, and they also meet the global goals of net zero for ASEAN.”
UOB’s commitments include interim 2030 targets to reflect the necessary near-term progress on the path to net zero.
UOB’s net zero targets and commitments for the six sectors are:
|
Sectors |
Goals by 2030 |
Goals by 2050 |
|
Power |
Reduce emissions intensity by 61 per cent |
Reduce emissions intensity by 98 per cent |
|
Automotive |
Reduce emissions intensity by 58 per cent |
Net zero |
|
Oil and gas |
No new project financing for upstream oil and gas projects approved for development after 2022 |
|
|
Real estate |
Reduce emissions intensity by 36 per cent |
Reduce emissions intensity by 97 per cent |
|
Construction |
Reduce emissions intensity by 31 per cent |
Reduce emissions intensity by 85 per cent |
|
Steel |
Reduce emissions intensity by 20 per cent |
Reduce emissions intensity by 92 per cent |
In addition, UOB has committed to exiting financing for the thermal coal sector by 2039. This is on top of its existing prohibitions on new project financing of greenfield or expansion of coal-fired power plants and thermal coal mines.
UOB is integrating its net zero plans into its business strategies and will step up its efforts in working closely with clients and other stakeholders towards decarbonisation. It will conduct annual reporting to track progress against its net zero commitments. Over time, the Bank will expand the scope of its targets to include additional sectors as data and climate scenarios become available.
Ms Ng Wei Wei, Chief Executive Officer, UOB Malaysia, said, “Our net zero targets are aligned with Malaysia’s commitment to achieve its net zero ambitions1. We have been working closely with our clients to provide appropriate solutions that are impactful, and will continue to double down on this effort. We understand that decarbonisation is not a one-size-fit-all solution and will need to work with different sectors to understand their challenges and requirements to help them in their transition journey.”
Underlining its commitment to regional and global decarbonisation efforts, UOB has joined the Net-Zero Banking Alliance (NZBA)2, which is made up of 121 banks from 41 countries with US$70 trillion in global banking assets.
For more information, please visit www.UOBSustainability.com.
1On 5 Jun 2022, the Malaysia’s Prime Minister said that the country is committed to becoming a carbon-neutral nation by as early as 2050.
2The NZBA is convened by the United Nations Environment Programme Finance Initiative and is the banking element of the Glasgow Financial Alliance for Net Zero (GFANZ).