Are Philippine banks really divesting from dirty energy?
AS PHILIPPINE banks have used last month to convene for their Annual Shareholders Meetings, it is also time to take stock into their commitments for pursuing genuine sustainability.
For years, civil society groups worldwide have been pressuring financial institutions to divest their assets from fossil fuels. These sources of dirty energy are the primary source of greenhouse gas (GHG) emissions that trigger human-induced climate change.
A recent global report revealed that keeping operating current fossil fuel infrastructures and those still in the pipeline would result in at least a two-degree warmer world, bringing about more extreme climate impacts.
Partly because of this, experts have forecasted an estimated USD4 trillion of stranded assets under fossil fuels, making them economically undesirable in the long-term. Most assets linked to coal, which currently powers around half of power generation in the Philippines, would become stranded globally by 2030.
Currently, funding for fossil fuels from public and private entities still outpace that for climate solutions, especially renewable energy (RE). Divestment from exploitative industries and their funders aims to cut the lifeline that allows for dirty energy to continue expanding, despite the clear imperative to stop doing so.
Are the banks really divesting?
Four banks have declared their intent to stop direct coal financing. The Bank of the Philippine Islands (BPI) and BDO Capital and Investment have both made public statements aligned with this move. BPI particularly plans to exit coal funding as early as 2033 and cut such financing by half in 2026, with consistent climate-related financial risk disclosures to stakeholders.
This year, Rizal Commercial Banking Corporation pledged to avoid coal financing by 2031, in addition to enhancing its lending for RE projects and being more transparent with its GHG emissions. Security Bank has recently expressed its goal to stop funding new coalfired power plants by 2033, joining these select few banks.
While commendable on the surface, it is evident that these pronouncements are nowhere near enough to reverse the tide against fossil fuel finance. According to the assessment of the Withdraw from Coal (WFC) network, 11 of the country’s 15 largest banks have yet to make any form of commitment to divestment from any fossil fuel; these include institutions such as Land Bank of the Philippines, Philippine National Bank (PNB), Metrobank, and China Bank. (Read full story on sunstar.com.ph/manila)