For a better world, there must be a better bank, In 2020, the COVID-19 epidemic is raging and has an impact on the global economy. ESG investment indicators that emphasize sustainability (including Environmental, Social, and Governance corporate governance) have become prominent and are expected to help investors reduce long-term risks.
DBS Group, which was selected as the Best Investment Bank for Sustainable Finance in the Asia-Pacific region by Global Finance magazine, has been in the sustainable finance market for many years. Marc Lansonneur, head of the investment product strategy management department of DBS Bank in Singapore, observed: “During the epidemic, investors’ demand for ESG products has greatly increased. Because people stay at home, they have more time to research and participate.”
Responding to the global sustainability trend, DBS is committed to becoming a leader in corporate sustainable development, and exerting positive social influence through the three major axes of responsible banking, responsible corporate operations, and creating social influence.
“For a better world, there must be better banks.” Marc, who is also a member of the DBS Group’s Sustainable Development Committee, believes that financial institutions not only create wealth for customers, but also make the world a better place.
Introduce ESG assessment tools to help customers improve financial literacy
In promoting responsible banking business, DBS Bank takes it as its own responsibility to communicate the importance of ESG to customers, and assists corporate customers and individual customers to make sustainable investments through multiple strategies.
For corporate customers, DBS Bank will adopt the ESG risk assessment process when companies raise financing needs. Through the 4 steps of identifying risks, assessing risks, making decisions, and regularly tracking, DBS Bank will help customers review the current ESG management status and production-manufacturing action plans.
Marc said: “We must explain the importance of ESG to customers and convince them that the practice of sustainability is not about cutting off benefits, but reducing environmental, social and corporate governance-oriented risks.”
For individual clients, DBS uses the MSCI ESG Rating launched by the world’s largest index company MSCI to help clients understand the sustainability risks in their investment portfolios.
For example, DBS Group launched the Wellington Global Impact Fund, which not only uses MSCI indicators as evaluation benchmarks, but also covers 10 themes of different sustainable goals, including renewable energy, clean Water resources, financial compatibility and other goals.
Marc emphasized: “We want customers to know more and use tools to make choices.” ESG ratings are not intended to replace traditional financial indicators, but to help customers determine investment portfolios based on the rate of return, but also add ESG risk considerations .
DBS hopes that after professional guidance, customers will be able to improve their financial literacy, identify ESG risks, and make their investments more sustainable.
Do a good job in employee communication and practice sustainable thinking from the inside out
In promoting responsible corporate operations, Marc believes that good employee communication is the top priority. “Before convincing customers, we must first convince employees to embrace sustainable strategies.”
Marc, who has many years of experience in French commercial bank, also observed the difference between promoting sustainable strategies in Europe and Asia. “In Asia, a completely tailored strategy is needed, as each country’s national conditions are very different. For example, in Europe, the environmental aspect is given special attention, but in Asia, the balance of environment, society and corporate governance is emphasized.”
In order to enable employees to build a sustainable mindset, DBS organizes various activities within DBS, ranging from topic advocacy to encouraging employees to practice it in their lives. For example, DBS Bank (Taiwan) held a bank-wide power-saving competition, calling on employees to save energy. Thanks to the efforts of all employees, DBS Bank (Taiwan) reduced electricity consumption by 200,000 kilowatt-hours compared with the previous year, equivalent to 500,000 kWh. electricity consumption of a family for a whole year.
Externally, DBS Group also encourages employees to select customers based on sustainability. Since 2018, it has completed more than 100 sustainable financial transactions, and ranked first among the host banks of the “Green Loan” by Bloomberg Global and the Asia-Pacific region in 2020. .
For example, DBS Bank (Taiwan) and renewable energy equipment manufacturer AU Optronics signed Taiwan’s first “sustainability index-linked loan” in 2019. If the sustainability performance reaches a certain benchmark, the bank will have to take the initiative to lower the loan interest rate. In 2021, DBS Bank Taipei Branch also announced the signing of a two-year perpetual linked loan with Wistron, a global information product provider, to add another boost to sustainable development.
Marc said: “One of the best ways to change society is to let money flow to the right companies.” DBS Bank implements sustainable thinking through internal and external two-way practices.
Join hands with social innovation partners to create positive influence
In terms of creating social influence, DBS Bank is committed to establishing partnerships with social innovation organizations, creating a social enterprise ecosystem, and jointly expanding positive influence. For example, DBS Bank (Taiwan), which focuses on supporting the growth of social enterprises, has supported the Asia-Pacific Social Innovation Summit for four consecutive years, helping Taiwanese social enterprises connect with international social innovation and expand overseas business opportunities.
Not only that, but the DBS Foundation also organizes the “DBS Social Enterprise Incentive Program” every year. In 2020, more than 800 applications from Asian social enterprises were received, and the total bonus exceeded NT$30 million. Among the 13 award-winning Asian social enterprises, 3 are from Taiwan, namely Sensi Eye Tracking, Fresh Dairy and Cai Chong Agricultural Food, making Taiwan the region with the most award-winning social enterprises in Asia.
From customers, employees to social innovation partners, DBS Bank is committed to making full use of financial expertise to promote sustainable development. Marc said frankly: “Sustainability issues are very broad. DBS Bank is very ambitious and aims to become a leader in this area.”
Talking about the future prospects of sustainable investment, Marc said hopefully, “I don’t think there will be ESG ratings in the future world, because all financial products should have built-in ESG.”