MID-sized lender Security Bank Corp. said it will no longer fund coal-fired power projects in the country by next year as part of the Philippines pledge to international agreements aimed at cutting the country’s emission of pollutants.
The bank said the decision was in line with the framework set by the 2021 United Nations Climate Change Conference of the Parties (COP26) and the 2015 Paris climate agreement to cut greenhouse gas emissions and limit global warming for a more sustainable future.
In 2020, the bank’s board approved its sustainability framework, which outlines its principles in addressing environmental, social, and governance issues.
Last year, the board approved its environmental and social risk management system, which details the policies and enhanced due diligence required for identifying, addressing and mitigating environmental and social risks in the bank’s operations, lending and investing practices and supply chain.
“A focus of our ESRMS is to specifically address sustainability and climate risk, as well as health and safety risk in our operations, investment practices, and supply chain. A key aspect of the ESRMS is our coal policy, which specifies our commitment to discontinue financing the construction of new coal-fueled power generation plants, with a view to exit funding coal generation by 2033,” Eduardo M. Olbes, the bank’s chief financial officer and chairman of the bank’s sustainability committee, said.
According to market and consumer research company Statista, the Philippines still relies on coal as the main source of energy, as of 2020, with 57 percent of the country’s energy needs coming from it.
Renewable energy sources such as hydro, wind, solar and geothermal energy make up only 21 percent of the country’s energy resources.
The bank said it will work with its clients in the energy sector who are committed to sustainable development by supporting the use of low carbon energy sources and financing new technologies to help in the transition to a low-carbon economy. The bank will provide these clients with support, both from a lending and capital market perspective.
The bank has also identified priority UN Sustainable Development Goals (SDG) that highlight areas where Security Bank intends to concentrate its efforts to deliver meaningful outcomes. These include Good Health and Well-Being (SDG 3), Quality Education (SDG 4), Decent Work and Economic Growth (SDG 8) and Industry, Innovation, and Infrastructure (SDG 9). These SDGs are integrated to its mission of enriching lives, empowering businesses, and building communities sustainably.
“Security Bank is committed to long-term sustainability by advocating lending, investment, and procurement activities that will help the country transition to a lower carbon economy and build resilience to climate change,” Olbes said.
Security Bank’s shares closed last Friday at P102.50 apiece.