Standard Chartered Bank has pulled out of three coal-fired power projects in Southeast Asia, marking a significant moment for corporate climate action in the region.
The London and Hong Kong-headquartered bank announced in a climate disclosure statement on Tuesday that it would only support clients that “actively transition their business to generate less than 10 per cent of earnings from thermal coal by 2030,” and would be withdrawing from three coal projects.
The company did not state which coal projects it would stop funding, but sources suggest that they are Vung Ang 2 and Vinh Tan 3 initiatives in Vietnam, and Java 9 and 10 in Indonesia.
StanChart announced more than a year ago that it would stop financing new coal plants, becoming the first major Southeast Asian-focused finance group to rule out funding any new coal power projects.
In addition to the three coal project withdrawals, StanChart said it had increased its target for financing clean technology and renewables to $35 billion by 2025.
Bill Winters, StanChart’s group chief executive, said in a statement: “We are taking bold and ambitious actions in support of the Paris Agreement, being the first bank active in emerging markets to confirm that we will be out of thermal coal by 2030 and set a massively increased target for helping our clients transition into low-carbon technologies.”
“Our footprint and expertise mean we are uniquely well-positioned to support this transition,” he said.
Commenting on the news, Bernadette Maheandiran, legal analyst for Market Forces, a non-government organisation that campaigns for banks to quit coal, said: “Standard Chartered has made a welcome decision to close the loopholes in its policy by pulling out of the lending consortia for three new coal-fired power stations in Southeast Asia.”
“These controversial and polluting projects, such as Vung Ang 2 in Vietnam, continue to stand in the way of Southeast Asia’s path to clean energy, breathable air and a safe climate”.
“Standard Chartered’s latest move should send a signal to other banks, including DBS, that building coal is financially risky, environmentally and socially unsound and morally reprehensible,” she said.
The news emerges in a significant year for climate action from financial services groups, even in Asia, the world’s most important region for new coal development. In a climate critical 11 days in May, all three of Singapore’s and Southeast Asia’s largest banks, OCBC, DBS and UOB, said they would cease new coal funding.
DBS, Southeast Asia’s largest bank, is the only one of Singapore’s big three banks that continues to fund coal, backing the development of the Vung Ang 2 facility.