Green investment and sustainable finance has progressively become a salient financial tool in pushing sustainable development in Hong Kong, as well as the greater Asia region. As ReThink Hong Kong, the city’s best attended and most ambitious business event for sustainable development, makes a return on October 5-6 at the HKCEC, it’s a unique opportunity to gain insights and solutions from sustainability practitioners and business leaders on wide ranging topics varying from reducing plastic packaging waste in Hong Kong to green investment in the banking sector.
Earth.Org sat down with Christine Ip, CEO Greater China at United Overseas Bank (UOB), ahead of her panel at ReThink on green investment and sustainable finance in Hong Kong and beyond.
Why Is Sustainable Development Important to You and to UOB?
I’m a firm believer in sustainability, especially after the turmoil of 2020 and the COVID pandemic. It has reminded me of my generation – the baby boomers – that we’re very blessed to enjoy fast economic growth. When we are the beneficiaries of such, we should not be the ones to create more problems for future generations. And as a banker in Asia, which is home to the international finance centre, we have to have the responsibility to ensure the right sustainability roads are being paved.
How is UOB Incorporating Sustainability Into Existing Banking and Finance?
Our main strategy in sustainability is incorporating environmental, social and corporate governance (ESG) into our credit evaluation and our approval processes. We offer a whole range of sustainable solutions in order to help our customers make a difference in their own businesses and communities and drive growth responsibly. We also promote climate-resilient practices, which supports our customers’ own transition to a lower-carbon economy.
Many of the countries in our portfolio are in ASEAN, which still faces challenges regarding air pollution and environmental protection. It’s important for us to play a part in that through our sustainable solutions.
Another key stakeholder in sustainability for us is our people and colleagues. As such, we embedded sustainability elements into our core values, which are: honourable, enterprising, united and committed. When we talk about “honourable”, it means doing the right thing. We believe the right thing to do is to protect the environment, and we just have to do it despite the fact it may not generate a lot of profit. Another example is of our value “enterprising”, where we develop our people and encourage them to speak up and to find creative solutions to help our company to work in a low-carbon environment. This could in the way we construct our offices, creating a flexibility to work from home or something as simple as reducing use of paper.
As a responsible financial services provider, we uphold corporate responsibility by maintaining the highest standards of governance and risk culture, ensuring regulatory compliance and protecting the financial system. We remain steadfast in our commitment to promote social development in the areas of art, children and education.
Both in our own operations as well as among our stakeholders, we actively encourage and support environmental stewardship efforts. Together, these efforts help us contribute to a strong and sustainable future for the wider community.
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Mrs Christine Ip, CEO – Greater China, UOB. Photo courtesy of UOB.
What Are Some Key Strategies in Achieving and Improving Green Investments?
Progressively, we have embedded more green finance element requirement standards into our product and approval policies. In fact, we stopped lending to some environmentally hazardous industries. At the same time, we are encouraging greater positive impact for the environment by providing better terms and loans to facilities that have shown green awareness.
At the group level, we have set a standard in providing more financing to sectors related to water, renewable energy, green transport infrastructure, and wastewater management. We set a target in 2019 doubling our combined portfolio of these sectors by 2023. This target was achieved in 2020, three years earlier than expected. This means we have to be even more vigilant and aggressive in supporting these sectors in the next few years.
In Asia, customers are gaining more awareness on sustainability but not necessarily understanding it. When we talk to some of the clients like the CFOs, they often ask: “How can you help us and what does that mean?” We try to share best practices among different regions and client segments, or customers in the same industries but different locations. In fact, we connect clients from different regions so that they start to think beyond.
Green Investment Is Progressively More Common in Hong Kong. Why Is It Important For the City to Play a Role in Sustainable Finance?
Hong Kong has always been the financial centre and we are the gateway to connect the rest of the world back to mainland China. That is why in order to sustain the city as an international financial centre, it’s our responsibility to foster the importance of sustainability and green investment, and to raise awareness and implement sustainable financial measures. We are a developed economy. If we have the luxury to support these efforts yet not do it, how can we expect the rest to shoulder? It’s important that we need to lead by example.
Are There Any Other Sustainable Targets Set Out By UOB?
Today, renewable energy forms 17% of our group power generation portfolio, which is an area we want to keep growing. Within the company, we set ourselves the goal that by 2040, all UOB-owned buildings across the whole portfolio globally need to be green focussed.
We are also the first bank in Asia to focus on the curation of smart cities. Singapore currently has a goal to develop and expand smart cities, and as we’re a Singapore-based bank, we are aligned in the same goal. In 2020, the group has launched a Smart City Sustainable Finance Framework, which helps make sustainable financing more accessible to companies contributing to the creation of sustainable smart cities.
How Do Events Like ReThink Help Achieve Your Sustainable Goals?
It’s so important that we educate, making sure the whole ecosystem and all the stakeholders within understand the importance of sustainability and actions needed. ReThink can help us listen to other companies navigating these environmental, sustainable, and social expectations. We need to share the difficulties and challenges we are facing. I am really looking forward to being inspired, learning, further refining and sharpening our sustainable strategies, allowing us to step up our actions to meet the needs for all stakeholders and customers. Most importantly, learning how to foster a genuine sustainable future and to make the world a better place for all of us.
Featured image: UOB’s sustainability advertising campaign that ran in the city earlier this year. Photo courtesy of UOB.