HCM CITY — A new World Wildlife Fund for Nature (WWF) report finds that Asean’s (Association of Southeast Asian Nations) biggest banks are increasingly aware of the impact their businesses have on the environment and society, but are slow to act on the huge potential they hold in addressing climate change and financing sustainable food, energy and infrastructure systems in the region.
The report, published in collaboration with the National University of Singapore (NUS) Business School’s Center for Governance, Institutions and Organizations, found that Asean banks were not disclosing how they managed climate risks in line with the recommendations of the Taskforce for Climate-related Financial Disclosures (TCFD).
The region is particularly vulnerable to climate change, which exacerbates food and water insecurity. By not considering these issues, banks stand to miss out on ‘game changing’ opportunities for the region’s sustainable development and may face unmitigated climate risks in their own balance sheets, according to the report.
Of the 34 banks assessed in six Southeast nations, including Việt Nam, only four disclosed that senior managers have oversight of climate change risks and opportunities, a key recommendation of the TCFD.
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Meanwhile, none of the banks disclosed whether they had reviewed their portfolio exposure to climate risks. They had also not disclosed their portfolio alignment with the Paris Climate Change Agreement or Sustainable Development Goals (SDGs).
Although some progress on Environment – Society – Governance (ESG) integration has been made, particularly on the part of Singaporean banks and a few Malaysian and Thai banks, disclosure of specific ESG requirements of banks across Asean remains limited.
