Net zero oil and gas? Not just yet for UOB

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?? This week: United Overseas Bank (UOB) unveiled its net zero strategy and commitments this week, and its approach to the oil and gas sector stands out for two reasons:

1. UOB will stop new project financing for upstream oil and gas projects approved for development after 2022; and
2. UOB did not make any net zero commitments for downstream oil and gas activities.

Deciding not to fund an entire segment of an industry is a consequential commitment for both the bank and the industry. No other bank in Singapore has taken such a step, so this is a rather bold move by UOB.

But that second part about not making commitments for downstream activities is less shiny, especially in the shadow of UOB rival DBS, which had committed to cut absolute emissions for its upstream, downstream and integrated oil and gas portfolio by 92 per cent by 2050.

It’s important to keep in mind that these are ultimately targets, which are not the same — and not as important — as outcomes. Assessing UOB’s oil and gas strategy on outcomes might be a struggle, however, because the bank has not disclosed the current emissions from this segment of its portfolio, unlike the other sectors for which UOB has net-zero targets.

On the surface, UOB appears to have put in place actions that are oriented toward lowering emissions in its oil and gas portfolio even though it has not committed to emissions targets. Measuring and disclosing the outcomes of those actions might help the bank to address concerns about its targets.

On another note, the United Nations Climate Change Conference – or COP27 – takes place in Egypt next week. BT correspondent Janice Lim is heading over, so look out for her stories and insights from the ground.

?? Top ESG reads:

1. Coal miner Golden Energy and Resources is preparing for a possible divestment of its thermal coal business.?
2. Capitaland Ascott Trust has issued sustainability-linked bonds to the International Finance Corp.
3. The Investor Agenda, a super group of investor-focused climate advocacy organisations, has put out its annual list of “asks” ahead of COP27.
4. Some of the world’s largest consumer goods companies will probably miss a target to make plastic packaging more sustainable by 2025, according to a new report.
5. China must tackle greenwashing and scale up its carbon markets to achieve its climate goals, say panelists.

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