FINANCIAL SERVICES | Staff Reporter, Singapore

OCBC adopts Equator Principles

This strengthens its environment and social (E&S) risk management disclosure.

OCBC has adopted the Equator Principles, an international risk management framework adopted by financial institutions worldwide, as a guide on how the bank will determine, assess, and manage environment and social (E&S) risk projects.

In a press release, OCBC revealed that as a signatory, it is required to strengthen its environmental, social and governance disclosure and reporting by disclosing information related to large-scale projects it has financed. This reportedly ensures that strict environmental and social standards are applied in line with international best practices during the project development, construction process, and follow-up monitoring.

The Equator Principles (EPs) is recognised internationally as the “gold standard” for E&S risk management for infrastructure projects, added OCBC, establishing a common standard for determining, assessing and managing environmental and social risks in large-scale development projects.

The EPs is based on the International Finance Corporation performance standards published by the World Bank Group and covers a majority of the project finance transactions originating from emerging markets, providing a minimum standard for due diligence and monitoring to support responsible risk decision-making.

Earlier this year, OCBC announced a new target of $25b by 2025 for its sustainable finance portfolio after surpassing its initial target of $10b in the first quarter of 2020 – two years ahead of schedule.

Notable deals include an A$25m green loan to ComfortDelGro to finance a hybrid bus fleet in Australia, a $1.95b green club loan to M+S for Marina One, and a sustainability-linked trade facility to support the trade and shipment of 50,000 metric tonnes of sustainably sourced sugar, valued at almost US$16m.

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